15 Country ETFs Ranked by Valuation and Momentum

|
 |  Includes: EIS, EPI, EWA, EWC, EWD, EWG, EWH, EWI, EWJ, EWK, EWL, EWN, EWP, EWQ, EWT, EWU, EWW, EWY, EWZ, FXI, RSX, SPY
by: Jersey Trader

Below we have a table of major country ETFs ranked by a combination of valuation and momentum.

Valuation is often one of the largest factors determining long term returns, while momentum has been more predictive of the short term. By combining both, we are trying to pick countries that have both long term and short term tailwinds.

We used median p/e, p/b, and p/s to compare valuations. Using the median instead of the average helped to make comparisons more accurate because some countries had significant number of companies with negative or unusually low earnings.

Momentum was compared by calculating an exponentially weighted rate-of-change calculation on ETFs representing each country. While this is my preferred method, comparisons using the previous 12 or 6 month returns are very similar.

Looking at the results, emerging markets appear to be a recurring theme. There also seems to be an Asian theme appearing. Four of the top five countries are emerging markets, while five of the top six are in (or partially in) Asia.

Rank Country ETF Median P/E Momentum Rank
1 South Korea EWY 12.4995 6
2 Brazil EWZ 14.85 4
3 Hong Kong EWH 13.34 2
4 Russia RSX 14.08 5
5 Taiwan EWT 14.505 7
6 Japan EWJ 8.434 17
7 Belgium EWK 11.5 14
8 Sweden EWD 16.64 3
9 Spain EWP 10.72 18
10 India EPI 23.79 1
11 Israel EIS 11.37 15
12 Switzerland EWL 15.835 8
12 Australia EWA 17.125 9
14 United Kingdom EWU 15.1 11
15 China FXI 15.635 12
16 France EWQ 14 21
17 Canada EWC 17.115 10
18 Italy EWI 15.66 22
19 Germany EWG 19.71 20
19 United States SPY 16.03 16
21 Netherlands EWN 19.933 19
22 Mexico EWW 17.97 13
Click to enlarge



Disclosure: Long EWJ