5 Market-Beating International ETFs YTD

by: Zacks Funds

The worries that cropped up last year intensified with the start of this year, leading to brutal trading in stocks across the globe. This is especially true as the Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) targeting the international equity market has lost about 5.8% from a year-to-date look compared to a loss of 5.5% for iShares MSCI ACWI Index ETF (NASDAQ:ACWI), which targets the global stock market including the U.S.

In particular, the collapse in oil price to below the 12-year lows and persistent weakness in China are the major culprits of the woeful performance. Emerging markets have been struggling while developed markets are also exhibiting slow growth amid streaks of volatility and uncertainty. The U.S. economy has also started to feel the pain of an ongoing financial instability and global growth concerns given that GDP growth came to a standstill in 2015.

Notably, the global stocks had wiped out nearly $7.8 trillion in value in the first three weeks of 2016. However, the stocks rebounded at the end of the fourth week following additional stimulus hopes from the European Central Bank (ECB) to print more money and cut interest rates further. Additionally, the Bank of Japan (BoJ) propelled the stocks higher by pushing its interest rates to a negative territory. Further, oil has also gained momentum reversing some of the losses incurred in the year (read: Japan ETFs to Buy on Negative Interest Rates).

While this is true, the positive sentiments proved to be short-lived and the global stocks again started another week on a sour note. In such a weak backdrop, most of the international markets and their ETFs have been able to fight through the bearish trend and have delivered handsome returns so far this year crushing the SPDR S&P 500 Trust ETF (NYSEARCA:SPY). Below we have highlighted some of them:

iShares MSCI Indonesia Investable Market Index Fund (NYSEARCA:EIDO)

This is the most popular ETF tracking the Indonesian market with AUM of $252.4 million and average daily volume of more than 722,000 shares. The fund tracks the MSCI Indonesia Investable Market Index, holding 87 securities in its basket while charging 64 bps in annual fees from investors. The product is somewhat concentrated on both sectors and securities. The top two firms account for at least 11% of total assets each while from a sector look financials dominates the fund's return with more than one-third share. Consumer discretionary, telecommunication services and consumer staples round off the next three spots with a double-digit exposure each. EIDO has added 3.6% so far this year and has a Zacks ETF Rank of 3 or 'Hold' rating with a High risk outlook (read: Believe in T Rowe Price? Invest in These EM ETFs).

iShares MSCI Thailand Capped ETF (NYSEARCA:THD)

The fund targets the Thailand equity market and tracks the MSCI Thailand IMI 25/50 Index. It has amassed nearly $218.2 million in its asset base and trades in good volume of 186,000 shares a day on average, probably ensuring no additional cost beyond the expense ratio of 0.64%. In total, the ETF holds 126 stocks, with each accounting for less than 7% share. It is somewhat concentrated from a sector perspective as financials comprises more than one-fourth of total assets while energy and industrials round off the next two spots with double-digit exposure each. The product is up 3.4% in the year-to-date timeframe and has a Zacks ETF Rank of 3 with a Medium risk outlook.

iShares MSCI Malaysia ETF (NYSEARCA:EWM)

This ETF follows the MSCI Malaysia Index and has a targeted exposure to the Malaysian stock market. Holding 43 stocks in its basket, the fund is highly concentrated on the top three firms with at least 9% share each while the other firms hold no more than 5.7% of assets. Financials dominates the fund's return at 30.3%, followed by industrials and utilities that make up for 14.8% share each. The fund has been able to manage assets worth $217.3 million and charges 47 bps in fees per year from investors. It is heavily traded with average daily volumes of 2.21 million shares. EWM has gained 3.4% this year so far and has a Zacks ETF Rank of 3 with a Medium risk outlook.

iShares MSCI Chile Capped ETF (NYSEARCA:ECH)

This product provides exposure to 31 Chilean stocks by tracking the MSCI Chile IMI 25/50 Index. Here again, the top three firms dominate the portfolio with at least 8% share each while other firms account for less than 6.8% of assets. Further, about one-third of the portfolio is allotted toward utilities while financials and materials also receive double-digit exposure each. The ETF has accumulated $177.3 million in AUM and sees solid volume of more than 290,000 shares a day on average. Expense ratio came in at 0.64%. The fund is up 2.8% in the same period and has a Zacks ETF Rank of 3 with a Medium risk outlook.

Deutsche X-trackers MSCI Mexico Hedged Equity ETF (NYSEARCA:DBMX)

This product offers exposure to the Mexican equity markets while at the same time hedges against any fall in the peso against the U.S. dollar by tracking the MSCI Mexico IMI 25/50 US Dollar Hedged Index. The fund holds 62 securities with the largest allocation to the top two firms that collectively make up for 22.9% of assets. From a sector look, consumer staples accounts for the largest share at 30.4% closely followed by financials (20.9%), telecom (14%) and industrials (13.2%). The fund has amassed $4.1 million in its asset base while trades in light volume of about 2,000 shares. It charges 50 bps in fees per year and has added 2.3% so far this year. DBMX has a Zacks Rank of 2 or 'Buy' rating with a Medium risk outlook.

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