A new all-ETF model portfolio is now available to ETFdb Pro members; the Ex-Europe ETFdb Portfolio offers a unique investment strategy for those looking to steer clear of European stocks and bonds that have endured a rocky stretch over the past two years and seem poised for additional challenged ahead.
The Eurozone has seen its financial health deteriorate significantly over the past 2 years as member countries have lagged behind in the economic recovery while government deficit and debt levels have been rising across the board. The financial health of the Eurozone took a dive for the worst in early 2010, when officials approved a 750 billion euro bailout package to support the crumbling financial systems of Portugal, Italy, Ireland, Greece, and Spain, also known as the PIIGS. Debt woes continue to plague the region today, as investors are becoming even more frustrated following the numerous downgrades of European debt given the regions dim hopes for a robust recovery. Investors have begun to seek out selective international exposure as many critics point out that continued economic disparities overseas could lead to the breakup of the Eurozone.
Our new Ex-Europe ETFdb Portfolio is designed for investors looking to build a broad-based portfolio that avoids exposure to European equities at all costs. Investors may wish to avoid exposure to Europe given the regions lackluster financial health coupled with unattractive growth prospects. This ETFdb Portfolio is similar to traditional portfolios; equity exposure is split between developed and emerging markets while fixed income exposure is also included as a core holding. However, the key difference is that for this portfolio we have chosen to entirely exclude exposure to any European country, whether it’s a developed giant like Germany or an emerging market like Poland.
In order to avoid exposure to European stocks we take a piecemeal approach to international equity exposure, building a broad-based portfolio with a handful of ETFs offering access to more promising corners of the global economy. For example, we have included targeted exposure within South America and Africa, since these two regions present a lucrative investment opportunity, given their rising populations which are contributing to a growing consumer base as well as rising levels of urbanization.