4 Countries To Focus On In June

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 |  Includes: ECH, EIDO, ENOR, EWG, FGM, NORW
by: Accuvest Global Advisors

Summary

Emerging markets are gaining momentum and increasing their representation in the top part of our country ranking model.

Norway and Indonesia are our two fastest rising countries.

Chile and Germany are continue to drop in our rankings.

Heading into June, we think that the 4 countries listed below warrant extra focus. Our complete list of country rankings can be accessed here: Country Ranking Model

3 Points to set the Global Landscape

  1. Through the first 5 months of the year, country returns have been tight. The MSCI ACWI Index is up 4.22% this year and the average country is up 6.08%.
  2. Emerging markets are gaining momentum. Over the last 3 months the MSCI EM Index is up 7.02% while the MSCI USA Index is only up 3.56% and MSCI EAFE Index is up 2.44%.
  3. Turkey is well into a breakout within the Emerging Market region. The MSCI Turkey Index is up 37.71% over the last 3 months, outpacing the ACWI by over 34%. However, Turkey only makes up 1.73% of the emerging markets index.

2 Countries that are rising

Norway (BATS:ENOR)(NYSEARCA:NORW) rose 11 spots from 13th to 2nd overall, in the June rankings. Norway has great momentum and even better valuations. The P/E on Norway is 13.3 compared to the average country at 16.9. Norway may also stand to benefit from ongoing ECB activity.

Indonesia (NYSEARCA:EIDO) moved into the top 5 and is currently ranked 4th overall. They are the second best performing market this year, up 22.97%. Additionally they have one of the best fundamental profiles showing the highest ROE and internal growth rate.

2 Countries that are falling

Chile (NYSEARCA:ECH) fell 3 spots and is now the lowest ranked country we follow. Despite improving performance in Latin America, Chile has had declining momentum and increasing risk. The Chilean peso is overvalued which will be an additional headwind.

Germany (NYSEARCA:EWG) (NASDAQ:FGM) fell out of the top 5 and is now ranked 15th overall. Fundamentals and momentum have quickly deteriorated. Germany has underperformed the average country in the MSCI ACWI Index by 5.62% over the last 3 months.

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Disclosure: The author is long ECH, EIDO, ENOR, EWG, FGM, NORW.

Business relationship disclosure: Accuvest Global Advisors is a registered investment advisor in the SF Bay Area. This article was written by David Allen, one of portfolio managers. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article.