Market Overview

A Look At 4 ETFs From The 4 'Least Corrupt' Countries

A Look At 4 ETFs From The 4 'Least Corrupt' Countries

The Transparency International 2014 Corruption Perceptions Index has been released and, according to the report, the least corrupt nations on Earth are Denmark, New Zealand, Finland and Sweden. There has been no change to the top four over the last two years. The United States came in at an unimpressive ranking of 17.

As investors look overseas for investing opportunities, it may not hurt to invest money in countries where corruption is not a major issue. On the flipside, their perception of corruption level does not necessarily suggest investment returns greater than their peers. Below is a look at the performance of ETFs that track the top four countries.

iShares MSCI Denmark

The iShares MSCI Denmark Capped ETF is a basket of 41 Danish stocks with a heavy emphasis on the industrial and financial sectors. The ETF has struggled to regain its high from earlier this year, but remains higher by 8 percent in 2014. With 23 percent of the portfolio invested in Novo Nordisk A/S (ADR) (NYSE: NVO), the ETF will often be driven by big moves in the pharmaceutical stock that is currently trading 6 percent below an all-time high set in September. The expense ratio is 0.53 percent.

Related Link: Corruption Conundrum: Some Corrupt Nations Have Great ETFs

iShares MSCI New Zealand

The iShares Trust (NYSE: ENZL) is composed of 31 stocks that are spread amongst several sectors, giving investors diversity within the country. The ETF is up 8 percent this year and is also struggling to get back to the all-time high it set early May. It is difficult for U.S. investors to gain access to the island country, and this ETF is probably the best route for gaining exposure to New Zealand. The expense ratio is 0.48 percent.

iShares MSCI Finland

The iShares MSCI Finland Capped ETF has 40 Finish companies in the portfolio, with the most renowned making up 20 percent of the allocation. The communication equipment company, Nokia Corporation (ADR) (NYSE: NOK), is the ETF’s largest holding, but there is also a high exposure to the industrial sector. The ETF has struggled this year with a loss of 5 percent, and it is down 12 percent from the early June all-time high. The expense ratio is 0.53 percent.

iShares MSCI Sweden

The iShares MSCI Sweden Index (ETF) (NYSE: EWD) is made up of 32 stocks with over half of the portfolio in the financials and industrial sectors. The majority of the stocks in the portfolio do not trade on a major U.S. exchange, however Ericsson (ADR) (NASDAQ: ERIC), the communication equipment firm, is the No. 2 holding at 10 percent of the portfolio. The ETF is down 7 percent in 2014 as it failed once again earlier this year at a significant resistance level near $38 per share. The expense ratio is 0.48 percent.

While it would be great to invest in a country that has little to no corruption, it does not always correlate to better-than-average gains. All four ETFs above have lagged the S&P 500 in 2014, and are struggling to regain the old highs set earlier this year.


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