https://money.usnews.com/investing/funds/slideshows/7-country-etfs-for-global-investorsNov. 15, 2018
In the recent hard-fought midterm election, there was a lot of rhetoric about America's economic relationships with other nations. Whatever you feel about trade policies, it's important to understand that in 2018 it has been "America first" in terms of investment.
Compared with other major economies, the domestic stock market as measured by the S&P 500 index has outperformed. Of course, with a roughly 5 percent return since Jan. 1, that's not saying much – and as history shows, today's winners can turn into tomorrow's losers.
Whether you're seeking global diversification or to simply increase returns, here are seven country-specific exchange-traded funds outside the U.S. to consider.
1. Xtrackers MSCI Germany Hedged Equity ETF (ticker: DBGR). Many investors look to Europe for developed-market exposure outside the United States. And since Germany is the region's largest economy and one of its biggest political forces, that makes this nation at the top of the list – particularly amid sticky fights about Brexit that could cause problems for the United Kingdom's economy.
It's worth noting this isn't the largest fund to play Germany – that would be the iShares MSCI Germany ETF (EWG) with $2.6 billion in assets. However, DBGR is hedged against currency fluctuations. Both DBGR and EWG are in the red this year, but that hedging has resulted in moderately lower losses for DBGR.
2. WisdomTree Japan Hedged Equity ETF (DXJ). Japan is the No. 3 national economy by GDP, behind China and the U.S., and that makes this a fund worth holding for serious global investors. Like the prior ETF, the DXJ is hedged against local currency fluctuations and is more of a direct play on whether the underlying stocks in Japan go up or down.
But again, a currency hedge alone can't keep this fund above water, and it has declined about 8 percent year-to-date in 2018 compared with a roughly 8 percent gain for the S&P 500 in the same period. – Jeff Reeves
Top Emerging Market Bond Funds to Buy
Fund Name Net Assets 1 Year Return
Payden Emerging Markets Bond Fund PYEMX $1.3B
-2.62%
PIMCO Emerging Markets Corporate Bd Fd PEMIX $137.1M
0.02%
Franklin Emerging Market Debt Opps Fund FEMDX $524.9M
0.56%
TCW Emerging Markets Income Fund TGEIX $4.7B
-2.59%
DoubleLine Emerging Markets Fixed Inc Fd DBLEX $969.8M
-1.98%
Fidelity® New Markets Income Fund FNMIX $5.1B
-4.59%
GMO Emerging Country Debt Fund GMCDX $3.8B
-4.08%
T. Rowe Price Instl Emerging Mkts Bd Fd TREBX $407.8M
-3.68%
Stone Harbor Emerging Mkts Debt Fund SHMDX $1.2B
-3.51%
PIMCO Emerging Markets Bond Fund PAEMX
Comments
One may diversify to a point of a wash of profits potential.
Although it appears that the "save the markets" QE program saved our financial butts (U.S.) for the time being has worked......the price for this may have to be paid again.
The U.S. still remains the front runner in the financial turd pile.
The below chart has only a few non-U.S. choices. DXJ being the only close match for returns over the past 4 years. A longer time frame chart would indicate better performance for the U.S. equity market against others.
DXJ has much of its stimulus/growth from the Bank of Japan and its large ownership of Japanese equity sectors.
Wishing the best, to those, in choosing where to diversify globally for the positive benefit of the portfolio.
https://stockcharts.com/freecharts/perf.php?SPY,IXUS,IEUR,DXJ,FNMIX&p=6&O=011000
NEW !!! This WSJ article did open w/o subscription.........don't know how you'll do with this. NOPE.......won't open again. The link line tells much of the story for BOJ and its involvement with their marketplace.
https://www.wsj.com/articles/bank-of-japans-bond-and-stock-holdings-top-100-of-gdp-1542086889
It seems this is the top half (10/21) of US News' list of Emerging Markets Bond funds.
https://money.usnews.com/funds/mutual-funds/rankings/emerging-markets-bond
US News' rankings don't represent buy recommendations. They're just aggregations of five other sources of rankings ("Morningstar, Lipper, Zacks, TheStreet.com, and CFRA") , where those other rankings likewise don't represent buy recommendations.
https://money.usnews.com/money/personal-finance/investing/articles/2010/02/23/about-the-us-news-mutual-fund-score
For example, for M*, US News links to M*'s star rating methodology. The star ratings are retrospective. In contrast, M*'s analyst ratings are intended to be used prospectively. But those aren't the ratings that US News is looking at.
With respect to funds that invest primarily in emerging market bonds, how about TGBAX? Aside from cash and short term (9 month or shorter) holdings in Treasuries, virtually all of this fund's bond holdings are in EM bonds (per semi-annual statement), and AFAIK have been for several years.
It has beaten all the funds listed over the past year (1.81%). It sports an ER (0.71%) that's within one basis point of the cheapest fund posted.
From the ETF column, we see that at least Jeff Reeves over at US News likes the idea of hedging yens and Euros. Now if one doesn't like having exposure to these currencies, why stop at neutral? That's Hassenstab's thinking (TGBAX) as well. "We also continued to hold net-negative positions in the euro and Japanese yen as hedges against a broadly strengthening US dollar..."
Semiannual report, June 30, 2018.