Find Growth Abroad
The most recent GDP numbers in the US reflected steady growth at over 4%. However, the US, being the largest economy in the world, is certainly no match for the growth China and company have to offer, specially considering the falling dollar and its impact on trade and foreign investment. At over 10% growth, Chinese stocks still present a high growth opportunity. But most investors are not comfortable going into the land with the pegged currency, communism and an insatiable demand for commodities. No worries – there are many other economies, lesser known than China, that look extremely attractive. Just look at the chart below for the kind of returns generated in these markets last year.
So how can you invest easily without taking on excessive risk? The obvious answer is ETF’s. Below are some ETF’s that will help you invest in these hyper-growth markets. Keep in mind when buying these ETF’s, that they have all been in an uptrend. However, a slight pull back is certainly overdue. Finally, these economies, while producing higher returns, also present higher risk.
EWC – Canada: Oil sands, minerals, uranium, metal, mining. Canada has been on a tear.
EWG – Germany: With an increasing consumer sentiment and business growth, Germany is finally coming back.
EWZ – Brazil: With more flex cars than in the US, and oil, soybean, corn and coffee trading high, Brazil can do no wrong. It has been gowing at
EWK – South Korea: Benefiting from the Chinese expansion, from cars to technology, South Korea is getting propelled by the China effect.
ILF – Latin America: Covers Mexico, Brazil, Argentina and Chile. All developing economies. In fact, Argentina is tipped to be the next big tech outsourcing market.
EWA – Australia: Along with Canada, one of the safest, yet fast growing economies steamed by a bustling demand for commodities.
EZA – South Africa: Gold is primarily the reason this ETF has done so well. It is very highly pegged to the metal.
IFN – India: It is the cheapest ETF of this list. Trades at a little over (P/E) 5. Infastructure demand will fuel this growth ETF to all time highs every passing year.
I am still looking for ways to invest in Egypt, Turkey, Russia and Poland. If you know of any stocks, funds or ETF’s, please do share your ideas. You will notice I left out Japan, Belgium and Austria. While they are all good, I chose to list only my favs.
– Faisal Laljee
P.S: Check out the new Commodities Corner.
