Since hitting a high on April 4th, the SPDR S&P 500 ETF SPY has fallen over 2 percent as the momentum stocks have succumb to profit-taking. The ETF breached the 50-day moving average for the second time this year during the pullback before attempting to rally this week. The choppy trading has not affected the overall market too much, but individual stocks and ETFs have fared much worse.
Meanwhile, a handful of international ETFs have been able to avoid the selling and have attracted buyers as U.S. stocks struggle. The one trend that has been evident overseas has been money flowing into emerging and frontier markets. Many of the countries underperformed the U.S. last year, but have now reached levels that are attractive on a valuation basis.
Global X Nigeria Index ETF NGE
The country more known for corruption and geopolitical concerns than the fact they are the Africa’s largest oil producer has a bright future. According to the U.N., the country could have a population that is larger than the U.S. by 2050 and with that magnitude of growth there are investment opportunities. The beauty of an ETF is that investors are able to gain access to a wide range of stocks and sectors within Nigeria. The continents largest economy, according to the country’s numbers will provide big upside potential, however investors must be aware of high volatility and the potential of sizable pullbacks.
iShares MSCI Philippines ETF EPHE
The ETF has quietly put together a solid 2014 with a gain over 13 percent for the year. This follows a great 2012 and a loss of 8.5 percent last year. The trend has appeared to shift back to the bullish side as the extremely young country, median age of 23, is back on the right track. The financial stocks make up the largest portion of the portfolio, which is a positive as consumption has been steady along with the probability of more infrastructure projects in the country.
iShares MSCI Thailand Capped ETF THD
Even though political tensions have been increasing over the last few months the ETF has been able to shrug off worries as it is now at the in five months and is up 10 percent in 2014. Similar to EPHE, the ETF struggled in 2013 before finding a bottom earlier this year. It appears investors are looking past the current situation and investing for the long-term positive outlook for the Southeast Asian economy.
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