Best And Worst Country ETFs Of 2012

by on December 24, 2012 | ETFs Mentioned:

For the first time in years, a U.S. ETF was one of the highest yielding of the year, as Dow Jones US Construction Index Fund (ITB) surged ahead of the pack. While home-building in the United States is the first sign of a recovery in the domestic market, elsewhere in the world there were positive and negative signs for the future. Some countries barely felt the economic crisis that shocked the foundations of the developed world, while others are still trying to regain their footing. In this quickly expanding global economy, countries have to recover fast or get left behind [For updates on all new ETFs, sign up for the free ETFdb newsletter].

Below, we highlight a handful of country-specific ETFs that have surpassed all others since the beginning of 2012 (note that inverse and leveraged ETFs are excluded from this list):

Ticker ETF YTD Return
 TUR MSCI Turkey Investable Market Index Fund  61.8%
EPHE MSCI Philippines Investable Market Index Fund 47.6%
EGPT Egypt Index ETF 46.0%
EPOL MSCI Poland Investable Market Index Fund 38.7%
THD MSCI Thailand Index Fund 37.1%
  1. MSCI Turkey Investable Market Index Fund (TUR, A-), Up 61.8%: This emerging market has taken off like no one would have believed possible years ago. This fund, which seeks to measure the performance of the Turkish equity market, is made up of almost 100 holdings and features a tilt to the booming financial sector and industrials.
  2. MSCI Philippines Investable Market Index Fund (EPHE, C), Up 47.6%: This ETF is designed to measure and monitor the performance of publicly-traded companies listed in the Philippines and is made up of almost 50 firms. The even-sector approach covers all corners of this mostly industrial and quickly growing economy.
  3. Egypt Index ETF (EGPT, C), Up 46.0%: Even though it has been far from a peaceful year in Egypt, the economy seems to have reset after years of slump under Hosni Mubarak [see Emerging & Frontier Markets ETFdb Portfolio].
  4. MSCI Poland Investable Market Index Fund (EPOL, C), Up 38.7%: This European manufacturing center was able to avoid much of the crisis because they had not yet adapted to the euro, and this year it was the only European market to return more than 30% by the end of 2012.
  5. MSIC Thailand Index Fund (THD, C+), Up 37.1%: This emerging market has really taken off. This fund, which seeks to measure the performance of the Thai equity market, has over 80 holdings and features a tilt to the booming financial sector.

Below are three country-specific ETFs that missed out the most over the past year:

Ticker ETF YTD Return
ARGT FTSE Argentina 20 ETF -15.9%
RSXJ Market Vectors Russia Small Cap ETF -6.0%
CNDA IQ Canada Small Cap ETF   -5.4%
FJP Japan AplaDEX Fund -4.9%
EWZ MSCI Brazil Index Fund -1.3%
  1. FTSE Argentina 20 ETF (ARGT, A-), Down 15.9%: While most emerging market have seized the opportunity to rise while developed markets are down, Argentina is on the edge of being demoted to a Frontier market. This Latin market has some of the highest inflation rates, but has shown little government initiative to fix this economy crushing issue [see Free Report: How To Pick The Right ETF Every Time].
  2. Market Vectors Russia Small Cap ETF (RSXJ, C), Down 6.0%: Made up of mostly industrial and basic material firms, RSXJ has failed to capitalize on the quickly growing Russian market. Part of this could be due to the continuing riots and clashes with police in Moscow, which have destroyed many small businesses and homes.
  3. IQ Canada Small Cap ETF (CNDA, C+), Down 5.4%: Following First Trust’s AlphaDEX strategy of using a modified equal-dollar weighted index to objectively identify and select stocks from the S&P Japan BMI Index that may generate positive alpha has clearly not worked out over the last year, even as the economy continues to move back into relevance.
  4. Japan AlphaDEX Fund (FJP, C), Down 4.9%: While investing in small caps can lead to high returns in select markets, this strategy seems not to have worked in Canadian markets since the beginning of 2012. Made mostly of basic materials and energy firms, it no surprise that the energy price slump has not been good for the producers.
  5. MSCI Brazil Index Fund (EWZ, A-), Down 1.3%: This BRIC powerhouse would never have been on the positive side of this list last year, as it surged during the initial global recovery period, but this evenly balanced fund has seen better days.

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Disclosure: No positions at time of writing.