ETF Trends
09-08-2008, 05:24 AM
ETF Trends - Keeping a Grip on Exchange Traded Funds (ETFs)
http://www.etftrends.com/wp-content/uploads/2008/09/usa1.gif (http://money.cnn.com/2008/08/26/pf/funds/ask_the_mole.moneymag/?postversion=2008082709)Until recently, foreign stocks have outperformed U.S. markets, but when considering exchange traded funds (ETFs), global diversification remains essential.
According to the Mole for CNN Money (http://money.cnn.com/2008/08/26/pf/funds/ask_the_mole.moneymag/?postversion=2008082709), U.S. stock funds have earned only 82% from 2003 through 2007.* These numbers are somewhat daunting compared to the 168% earned by international stock funds during the same period.
Regardless, it is vital to be exposed to U.S. markets and foreign markets*for a number of different reasons. The U.S. represents nearly 42% of the world market capitalization - meaning, 42% of the world stock market value. *Not considering the United States when investing would leave an enormous gap in a globally diversified portfolio.
A big part of the international appeal stems from emerging markets.* David Hoffman for InvestmentNews explains (http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080825/REG/823468/1009/TOC) that recent moves to floating exchange rates, an increase in the*independence of central banks, current account surpluses,*decreasing interest rates and reduced levels of debt all contribute to the attractiveness of emerging markets for investors taking a medium to long term investment outlook.
However, emerging markets*can be very volatile.* Investors need to maintain a balance between*wrecklessly pursuing returns and true global diversification.
Now, investing in international ETFs alone would simply be performance chasing.* Besides, many ETF investors have started to make the move back home investing*more in US markets.* As*we mentioned in a previous*story (http://www.etftrends.com/2008/08/etf-investors-advisors-have-been-coming-back-home.html),*for the first time*this decade, the US stock market and ETFs*are outperforming their international counterparts.* It is also important to note that hardly any funds investing in a single country are above their trend lines as of late.
However, some International/global ETFs to consider include:
Vanguard FTSE All-World ex-US ETF (VEU (http://finance.yahoo.com/q?s=VEU)), down 23.6% year-to-date
iShares MSCI EAFE Index (EFA (http://finance.yahoo.com/q?s=EFA)), down 23.4% year-to-date.
ELEMENTS Rogers Intl Commodity Agric ETN (RJA (http://finance.yahoo.com/q?s=RJA)), down 5.8% year-to-date
iShares S&P Global Healthcare (IXJ (http://finance.yahoo.com/q?s=IXJ)), down 8.5% year-to-datehttp://www.etftrends.com/wp-content/uploads/2008/09/z16.png
complete story here... (http://feeds.feedburner.com/~r/etftrends-feed/~3/386468633/international-etfs-are-appealing-but-diversification-is-key.html)
http://www.etftrends.com/wp-content/uploads/2008/09/usa1.gif (http://money.cnn.com/2008/08/26/pf/funds/ask_the_mole.moneymag/?postversion=2008082709)Until recently, foreign stocks have outperformed U.S. markets, but when considering exchange traded funds (ETFs), global diversification remains essential.
According to the Mole for CNN Money (http://money.cnn.com/2008/08/26/pf/funds/ask_the_mole.moneymag/?postversion=2008082709), U.S. stock funds have earned only 82% from 2003 through 2007.* These numbers are somewhat daunting compared to the 168% earned by international stock funds during the same period.
Regardless, it is vital to be exposed to U.S. markets and foreign markets*for a number of different reasons. The U.S. represents nearly 42% of the world market capitalization - meaning, 42% of the world stock market value. *Not considering the United States when investing would leave an enormous gap in a globally diversified portfolio.
A big part of the international appeal stems from emerging markets.* David Hoffman for InvestmentNews explains (http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20080825/REG/823468/1009/TOC) that recent moves to floating exchange rates, an increase in the*independence of central banks, current account surpluses,*decreasing interest rates and reduced levels of debt all contribute to the attractiveness of emerging markets for investors taking a medium to long term investment outlook.
However, emerging markets*can be very volatile.* Investors need to maintain a balance between*wrecklessly pursuing returns and true global diversification.
Now, investing in international ETFs alone would simply be performance chasing.* Besides, many ETF investors have started to make the move back home investing*more in US markets.* As*we mentioned in a previous*story (http://www.etftrends.com/2008/08/etf-investors-advisors-have-been-coming-back-home.html),*for the first time*this decade, the US stock market and ETFs*are outperforming their international counterparts.* It is also important to note that hardly any funds investing in a single country are above their trend lines as of late.
However, some International/global ETFs to consider include:
Vanguard FTSE All-World ex-US ETF (VEU (http://finance.yahoo.com/q?s=VEU)), down 23.6% year-to-date
iShares MSCI EAFE Index (EFA (http://finance.yahoo.com/q?s=EFA)), down 23.4% year-to-date.
ELEMENTS Rogers Intl Commodity Agric ETN (RJA (http://finance.yahoo.com/q?s=RJA)), down 5.8% year-to-date
iShares S&P Global Healthcare (IXJ (http://finance.yahoo.com/q?s=IXJ)), down 8.5% year-to-datehttp://www.etftrends.com/wp-content/uploads/2008/09/z16.png
complete story here... (http://feeds.feedburner.com/~r/etftrends-feed/~3/386468633/international-etfs-are-appealing-but-diversification-is-key.html)