The summer downturn was cruel to many international markets, with several developed and emerging exchange traded funds on track for a tough 2011 despite the recent bounce.
Since the market highs in spring, some global equity ETFs have taken a beating as investors dumped risky assets and piled onto safe-havens.
Still, these same downtrodden investments could hold allure for contrarian investors looking for undervalued ETFs, according to a report Monday.
Jim Woods for InvestorPlace highlights five global ETFs that have fallen more than 30% off their highs:
- iShares MSCI Germany Index (EWG). Year-to-date, EWG is down 17% as investors have quickly shunned Europe assets through the middle of the year. The fund has dropped 23.3% over the last three months, but EWG has made a 4.3% rebound over the last month. If a solid accord is reach in the Eurozone, investors should expect the European markets to stabilize and recover, Woods said.
- iShares FTSE China 25 Index (FXI). After an impressive run up in 2010, FXI has dropped 25% so far in 2011, even as the economy posts robust growth, albeit at a slower pace. As the global economy rebounds, China will continue to be a growth story. On Monday, the fund received a nice boost after China revealed higher-than-expected manufacturing numbers.
- PowerShares India Portfolio (PIN). While the World Bank projects India’s growth to slow to 7% to 8% for 2011 and 2012, the percentage expansion is still impressive. The country hosts a large population of educated workers and a big manufacturing sector. PIN is down 26% year-to-date, but it has jumped 5% since the start of October.
- iShares MSCI Brazil (EWZ). Brazil is rich in natural resources. However, EWZ’s large allocation to the various resource sectors has dragged on the fund. The ETF is down 28% year-to-date, but it has been rallying up 13% in October. This fund is a good play on a commodity producing country. [Brazilian Stock, Currency ETFs in Focus After Rate Cut]
- iShares MSCI BRIC Index Fund (BKF). BKF holds investments from BRIC countries – Brazil, Russia, India and China. While the fund is down 27% year-to-date, BKF has increased 11% since the start of October. Investors may play this fund on the eventual broad recovery in the global economy.
iShares MSCI Germany ETF
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Max Chen contributed to this article.