The 2012 Summer Olympic Games have been a spectacle of fierce competition and a seemingly never-ending journey in pushing the limits of the human body. This year’s games, which began on July 27 and officially end on August 12, have effortlessly captured our attention as athletes from 204 nations have gathered to compete in 26 sports. With everyone eager to see athletes going for the gold medal, we’ve decided to tap into our Olympic spirit by highlighting five A+ rated ETFs that deliver exposure to foreign equity markets [see also 3 Reasons Why Gold Is Overvalued].
The ETFs profiled below are deemed to be “gold medal worthy” as evaluated by our ETFdb Realtime Ratings; this is a rules-based framework for evaluating the efficiency of exchange-traded products. Similar to how the various events in track and field narrow down the list of the fastest people in each particular race, ETFdb Realtime Ratings objectively compare exchange-traded products with similar objectives. So just like there can only be one gold medal winner in the women’s 100m sprint, there is only one A+ rated ETP in each ETFdb Category [see also How To Pick The Right ETF Every Time].
Each ETP is assigned a Realtime Rating, ranging from A+ to C, on each of six different metrics: Liquidity, Expenses, Performance, Volatility, Dividends and Concentration. The fund with the highest average score across all of the metrics is then awarded an A+ rating within its respective ETFdb Category [also try our free ETF Country Exposure Tool].
5. Vanguard Pacific ETF (VPL)
Within the Asia Pacific Equities ETFdb Category, VPL takes home the gold medal. This ETF holds a broad portfolio of nearly 500 securities in total; from a geographic perspective, Japan and Australia take the top two spots followed by more minimal allocations to Hong Kong and Singapore. VPL boasts the cheapest price tag in its category, although AXJS offers exposure to a much deeper and less top-heavy portfolio.
4. Vanguard European ETF (VGK)
Vanguard takes home another gold medal in the Europe Equities space. VGK holds a number of well-known multinational stocks in its top ten including Nestle, HSBC, Vodafone, Novartis and Royal Dutch Shell, giving investors extensive indirect exposure to emerging and developed markets alike. Investors looking for a more attractive dividend yield ought to consider EWP instead, although VGK does boast the cheapest and most well-balanced portfolio among its competitors [see also Euro Free Europe ETFdb Portfolio].
3. iShares MSCI EAFE Small Cap (SCZ)
Those looking to round out exposure beyond giant and large-cap equities will have a hard time passing up SCZ as it boasts the highest overall score in the Foreign Small & Mid Cap Equities category. This ETF is tilted towards Japanese stocks which account for nearly one-third of total assets; the United Kingdom and Australia receive the next greatest allocations from a geographic perspective. SCZ dominates the competition when it comes to liquidity, although SCHC offers comparable exposure for a cheaper price tag, while MDD features a juicier dividend yield.
2. WisdomTree Japan Hedged Equity Fund (DXJ)
DXJ’s unique strategy earns it a gold metal in the Japan Equities space. This ETF offers exposure to nearly 700 Japanese stocks while at the same time hedging exposure to fluctuations in the currency market between the U.S. dollar and the Japanese yen. In simpler terms, this ETF delivers exposure to the Japanese market without incurring the effect of currency fluctuations, which can often have a material impact on bottom-line returns. Active traders who value liquidity above all else should take a closer look at EWJ as it also features a dynamic options market [see also 5 Important ETF Lessons In Pictures].
1. iShares Latin America 40 Index Fund (ILF)
ILF takes the number one spot when it comes to delivering Latin America Equities exposure. From a geographic perspective, this ETF allocates roughly half of its total assets to Brazil, while Mexico and Chile receive the next greatest allocations. The underlying portfolio is top-heavy; the top ten holdings account for nearly two-thirds of total assets. Investors looking for a more well-balanced alternative should take a closer look at LATM.
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Disclosure: No positions at time of writing.