The Best and Worst International ETFs in 2009

International ETFs have exploded in popularity, largely due to the fact that they make it relatively easy for an individual investor to trade a singe focused country or region. Remember, however, that ETFs differ from each other, sometimes in huge ways, so be sure to investigate the holdings and structure of an ETF/ETN before you invest or trade in it.

Let's take a look at the top-performing International ETFs on a Year-To-Date basis for 2009 (data source here):

2009 YTD Top Performing International ETFs


The top performers of 2009 thus far can basically be summed up with the acronym BRIC. This stands for Brazil, Russia, India, China -- the 4 countries that many perceive to be the "future economic superpowers". Such popular single-country ETFs as Russia (RSX), Brazil (EWZ), and India (WPI) (PIN) are near the top of the list. Several Asia region ETFs are spotted, many ex-Japan. Another region that is represented is Latin America, through the (ILF) ETF. A couple of other smaller country names appearing on the list are Thailand (THD), Austria (EWO), and Israel (EIS).

Now examine the YTD worst performing International ETFs below:

2009 YTD Bottom Performing International ETFs

You can see that this list is dominated by the established large economies of Japan (EWJ) and Germany (EWG), and various combinations of Europe/Japan.. Another interesting region that is on here as an underperformer is the Middle East, through the (GULF) and (MES) -- this is likely due to lagging oil prices in 2009.

Bottom Line: The aggressive growth areas of the BRIC regions, similar to what used to be called "emerging markets", have outperformed this year, while the more established, older economies of Germany/Europe and Japan have underperformed. It is worth noting that the BRIC countries either have a large commodity portion of their economy (Brazil, Russia) or are emerging consumer giants (China, India). Certainly there is a long-term demographic trend in favor of these countries' economies advancing quicker on a relative basis to the older more-established "Western" economies. Before plunging all your money into the BRIC and shorting Japan/Germany, however, remember that history has shown that this year's hottest performers are often next year's laggards, and vice-versa.

Disclosure: No current position or client recommendation in the securities mentioned.

Comments

[bluesmoke:]

Good analysis. Thanks.

Nov 09 09:39 AM