5 Developed Market ETFs Your Broker Forgot to Mention
Even with Europe's sovereign debt calamity running strong, there are still some worthwhile opportunities for investors in select developed markets outside of the U.S. Emphasis on "select" because what follows is by no means an endorsement of ETFs such as the iShares MSCI Italy Index Fund (NYSE: EWI) or the iShares MSCI Spain Index Fund (NYSE: EWP).
A report by Broadridge Financial Solutions cites that 90 percent of U.S. investable assets are not invested in international markets and while that is a more of a call for investors to wake up to emerging markets, there are some developed markets offering opportunities that may prove more lucrative than what can be found in North America and Western Europe.
With that, let's examine five developed market ETFs that could be winners going forward even though they're not garnering much fanfare at the moment.
iShares MSCI New Zealand Investable Market Index Fund (NYSE: ENZL) The iShares MSCI New Zealand Investable Market Index Fund is by no means unknown and the fund has started to attract some more attention lately, though some sources were on this train in in the third quarter of 2011.
Still, a lot of folks may not know there's a New Zealand ETF out there and those that do know about ENZL may not know about the ETF's secret weapon: A yield of 6.54%. Oh yeah, New Zealand has little Europe exposure to fret about.
iShares MSCI Singapore Small Cap Index Fund (NYSE: EWSS) One of the first new ETFs to hit the market in 2012 was the iShares MSCI Singapore Small Cap Index Fund, which debuted on January 10th as the small-cap complement to the popular iShares MSCI Singapore Index Fund (NYSE: EWS). While Singapore sits in a corner of the globe littered with emerging markets, the city-state has developed market status as highlighted by a per capita GDP rank that is among the top-20 globally.
And it is that combination of developed market status/emerging markets proximity that makes Singapore an alluring investment theme for 2012 and beyond. EWSS is the new kid on the block, but the ETF has raked in over $2.7 million in AUM since its debut. Be advised over half the ETF's weight is devoted to financials.
Global X FTSE Nordic Region ETF (NYSE: GXF) A couple of weeks ago, investors looking for some Scandinavian exposure via ETFs were limited to the Global X FTSE Nordic Region ETF, one Sweden ETF and one Norway ETF. That changed in a hurry. Now, there's two Norway ETFs along with new ETFs tracking Finland and Denmark. For the investor that cannot make up his Nordic mind, GXF is a sound option as it offers exposure to Sweden, Denmark, Norway and Finland. A move above $18 would make this fund all the more enticing.
WisdomTree DEFA ETF (NYSE: DWM) Offering exposure to 20 countries, the WisdomTree DEFA ETF will certainly help round out the international section of a portfolio and the yield of almost 4.6% is a nice bonus. Fans of diversification will like DWM as it features over 700 stocks across 10 sectors from 20 different countries. The quibble: Nine of those 20 countries are Euro Zone constituents. Even with that, the ETF is up almost 5% year-to-date.
WisdomTree Japan SmallCap Dividend Fund ETF (NYSE: DFJ) Calling a bottom in Japanese stocks has proven tricky in the past year and a strong yen is an issue that cannot be ignored. A fair portion of DFJ's sector mix is focused on Japan's domestic economy. Whether or not that works in 2012 remains to be seen, but small-caps might be the best way to play a resurgent Japanese economy.
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