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ETF Focus concentrates on new ETF product developments and highlights strategies to get the most out of your ETF portfolios.
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Friday, March 03, 2006
Around the World with ETFs
(Article by John Dobosz of Forbes.com about Chartwell)
Xenophobia won't do much to help drive your investment returns higher. In fact, U.S. equity markets have been downright laggards compared with their global counterparts in recent years, and especially so in the past six months.
Using exchange-traded funds for the sake of comparing returns among securities in which you can actually invest, you'll see that the domestic U.S. market has been the world's sick man. The S&P 500 Index SPDR (amex: SPY) has gained about 7.8% since August, but the nearly two-dozen country indices that make up the iShares MSCI EAFE Index (amex: EFA) are up about 15.8%. To double your returns again, you could have put money into the iShares MSCI Emerging Markets (amex: EEM) and earned a cool 31.6% in six months.
For a real eye-popper, check out Brazil. The iShares Brazil (amex: EWZ) is up a stunning 64.5% in the past six months, thanks to strength in natural resources and the vibrant Brazilian economy. Carl Delfeld, editor of Chartwell Advisor, enjoyed the ride on the Brazil ETF but swapped out of that hot fund and redeployed capital into the Latin America 40 ETF gaining exposure to Mexico and Chile.
In Europe, Delfeld has the Continent covered with allocations to iShares S&P Europe 350 (amex: IEV) and iShares European Union (amex: EZU). He's particularly bullish on Central European economies that benefit from the buildup of Eastern European economies. Here he has capital invested in Germany (amex: EWG), Austria (amex: EWO), Switzerland (amex: EWL) and Sweden (amex: EWD).
Recently we spoke with Delfeld about where he believes this year's gains will be in Asia.
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