Annual GDP Growth: A Good Predictor of Single-Country ETF Returns?
The ETF universe has grown by leaps and bounds over the last few years, and the product lineup has expanded beyond many investors’ wildest expectations. Through the use of a single ticker, anyone with an online brokerage account can now access virtually any asset class from around the globe, whether it’s emerging market small caps, commodities, or high-yield bonds.
When it comes to foreign equity exposure in particular, ETFs have undeniably opened up the doors to markets that were previously hard-to-reach for retail investors. For those researching opportunities abroad, staying on top of economic growth forecasts is likely at the top of their reading list. However, there has long been a great debate about whether or not GDP growth influences equity market returns in both developed and emerging economies [see Single Country ETFs: How They've Performed Since Inception].
In some instances, strong GDP growth has fueled bull markets, while in other cases, these two seemingly-correlated investment factors have not behaved as many would expect; that is to say, sometimes, weak GDP growth has coincided with stellar equity market returns. We’ll let the data speak for itself as we investigate this age-old conundrum below.
Click on any of the buttons below and you’ll see a table of countries along with a single ETF representative of each nation; also listed are the annual GDP growth rates for each nation along with the ETF’s performance for that particular year. Lastly, click on any of the column headings to re-sort the table whichever way you like.
For more ETF insights and analysis, sign up for the free ETFdb newsletter:
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | -0.77% | -47.68% |
| Germany | EWG | 1.08% | -45.55% |
| France | EWQ | -0.08% | -43.75% |
| Sweden | EWD | -0.61% | -46.91% |
| Austria | EWO | 1.44% | -63.49% |
| Netherlands | EWN | 1.80% | -49.00% |
| Belgium | EWK | 0.99% | -63.57% |
| Spain | EWP | 0.89% | -38.05% |
| Italy | EWI | -1.16% | -48.88% |
| Switzerland | EWL | 2.16% | -28.38% |
| Russia | RSX | 5.25% | -73.67% |
| South Africa | EZA | 3.62% | -37.62% |
| China | FXI | 9.63% | -47.78% |
| Malaysia | EWM | 4.83% | -41.30% |
| Singapore | EWS | 1.79% | -46.70% |
| South Korea | EWY | 2.83% | -56.49% |
| Japan | EWJ | -1.04% | -26.98% |
| Australia | EWA | 3.70% | -48.02% |
| United States | SPY | -0.29% | -36.80% |
| Canada | EWC | 1.18% | -44.62% |
| Mexico | EWW | 1.40% | -41.63% |
| Brazil | EWZ | 5.17% | -54.36% |
| Chile | ECH | 3.29% | -38.36% |
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | -5.17% | 36.23% |
| Germany | EWG | -5.15% | 20.54% |
| France | EWQ | -3.15% | 27.28% |
| Sweden | EWD | -5.03% | 55.46% |
| Austria | EWO | -3.82% | 57.84% |
| Netherlands | EWN | -3.67% | 40.84% |
| Belgium | EWK | -2.80% | 49.47% |
| Spain | EWP | -3.83% | 33.09% |
| Italy | EWI | -5.49% | 22.05% |
| Switzerland | EWL | -1.94% | 22.10% |
| Russia | RSX | -7.82% | 139.34% |
| Turkey | TUR | -4.83% | 103.10% |
| South Africa | EZA | -1.53% | 51.65% |
| China | FXI | 9.21% | 47.34% |
| India | EPI | 8.48% | 95.10% |
| Malaysia | EWM | -1.51% | 49.54% |
| Singapore | EWS | -0.60% | 67.93% |
| Thailand | THD | -2.33% | 81.47% |
| South Korea | EWY | 0.71% | 71.81% |
| Japan | EWJ | -5.53% | 3.24% |
| Australia | EWA | 1.74% | 68.20% |
| United States | SPY | -2.80% | 26.35% |
| Canada | EWC | -2.71% | 53.16% |
| Mexico | EWW | -4.70% | 53.88% |
| Brazil | EWZ | -0.33% | 122.00% |
| Chile | ECH | -1.04% | 86.09% |
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | 1.66% | 8.34% |
| Germany | EWG | 4.01% | 6.65% |
| France | EWQ | 1.72% | -4.70% |
| Sweden | EWD | 6.56% | 32.89% |
| Austria | EWO | 1.77% | 14.62% |
| Netherlands | EWN | 1.53% | 3.36% |
| Belgium | EWK | 2.34% | 3.70% |
| Spain | EWP | -0.20% | -21.18% |
| Italy | EWI | 1.72% | -15.54% |
| Switzerland | EWL | 2.95% | 12.66% |
| Russia | RSX | 4.50% | 22.14% |
| Turkey | TUR | 9.16% | 23.46% |
| South Africa | EZA | 3.14% | 36.98% |
| China | FXI | 10.45% | 3.54% |
| India | EPI | 10.26% | 20.25% |
| Malaysia | EWM | 7.43% | 37.67% |
| Singapore | EWS | 15.24% | 23.33% |
| Indonesia | IDX | 6.22% | 41.76% |
| Thailand | THD | 7.81% | 56.74% |
| Vietnam | VNM | 6.42% | 4.02% |
| South Korea | EWY | 6.50% | 28.80% |
| Japan | EWJ | 4.65% | 12.76% |
| Australia | EWA | 1.96% | 15.35% |
| United States | SPY | 2.51% | 15.06% |
| Canada | EWC | 3.37% | 19.00% |
| Mexico | EWW | 5.11% | 27.27% |
| Brazil | EWZ | 7.53% | 7.07% |
| Chile | ECH | 5.76% | 45.27% |
| Colombia | GXG | 3.97% | 51.73% |
| Peru | EPU | 8.45% | 57.22% |
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | 1.12% | -3.94% |
| Germany | EWG | 3.33% | -17.64% |
| France | EWQ | 2.03% | -17.69% |
| Sweden | EWD | 2.93% | -16.81% |
| Norway | NORW | 1.34% | -18.46% |
| Austria | EWO | 2.83% | -34.23% |
| Netherlands | EWN | 0.94% | -15.98% |
| Belgium | EWK | 1.75% | -15.37% |
| Spain | EWP | 0.05% | -9.82% |
| Italy | EWI | 0.45% | -24.12% |
| Poland | EPOL | 4.45% | -32.02% |
| Ireland | EIRL | 2.17% | -4.83% |
| Switzerland | EWL | 1.79% | -7.91% |
| Russia | RSX | 4.26% | -28.18% |
| Turkey | TUR | 8.77% | -36.56% |
| Egypt | EGPT | 1.76% | -51.71% |
| South Africa | EZA | 3.60% | -15.68% |
| China | FXI | 9.30% | -17.56% |
| India | EPI | 6.64% | -40.42% |
| Malaysia | EWM | 5.13% | -2.62% |
| Singapore | EWS | 6.06% | -18.60% |
| Indonesia | IDX | 6.49% | -0.60% |
| Thailand | THD | 0.08% | -4.23% |
| Vietnam | VNM | 6.24% | -43.83% |
| South Korea | EWY | 3.68% | -13.50% |
| Japan | EWJ | -0.45% | -14.77% |
| Australia | EWA | 2.24% | -11.57% |
| New Zealand | ENZL | 2.40% | 0.12% |
| United States | SPY | 1.85% | 1.89% |
| Canada | EWC | 2.53% | -12.42% |
| Mexico | EWW | 4.04% | -11.96% |
| Brazil | EWZ | 2.73% | -24.14% |
| Chile | ECH | 5.84% | -26.51% |
| Colombia | GXG | 6.59% | -15.20% |
| Peru | EPU | 6.45% | -21.78% |
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | 0.28% | 15.25% |
| Germany | EWG | 0.69% | 32.26% |
| France | EWQ | 0.01% | 24.35% |
| Sweden | EWD | 0.93% | 24.47% |
| Norway | NORW | 2.90% | 25.10% |
| Austria | EWO | 0.87% | 30.97% |
| Netherlands | EWN | -1.25% | 22.04% |
| Belgium | EWK | -0.14% | 35.21% |
| Spain | EWP | -1.64% | 5.39% |
| Italy | EWI | -2.37% | 15.41% |
| Greece | GREK | -6.97% | 29.09% |
| Poland | EPOL | 1.91% | 41.60% |
| Ireland | EIRL | 0.16% | 34.23% |
| Switzerland | EWL | 1.05% | 21.76% |
| Russia | RSX | 3.44% | 15.04% |
| Turkey | TUR | 2.13% | 65.60% |
| Egypt | EGPT | 2.21% | 44.56% |
| South Africa | EZA | 2.47% | 21.00% |
| China | FXI | 7.65% | 19.18% |
| India | EPI | 4.74% | 25.34% |
| Malaysia | EWM | 5.64% | 14.78% |
| Singapore | EWS | 2.50% | 31.76% |
| Indonesia | IDX | 6.26% | 2.40% |
| Thailand | THD | 7.67% | 40.13% |
| Vietnam | VNM | 5.25% | 26.40% |
| South Korea | EWY | 2.29% | 21.94% |
| Japan | EWJ | 1.45% | 9.22% |
| Australia | EWA | 3.61% | 23.99% |
| New Zealand | ENZL | 2.31% | 31.70% |
| United States | SPY | 2.78% | 15.99% |
| Canada | EWC | 1.71% | 9.09% |
| Mexico | EWW | 3.98% | 32.82% |
| Brazil | EWZ | 1.03% | 0.37% |
| Chile | ECH | 5.38% | 11.31% |
| Colombia | GXG | 4.05% | 27.38% |
| Argentina | ARGT | 0.95% | -17.79% |
| Peru | EPU | 5.95% | 23.51% |
| Country | Ticker | Annual GDP Growth | Annual Return |
|---|---|---|---|
| United Kingdom | EWU | 1.66% | 20% |
| Germany | EWG | 0.43% | 31% |
| France | EWQ | 0.21% | 24% |
| Sweden | EWD | 1.53% | 24% |
| Denmark | EDEN | 0.40% | 41% |
| Norway | NORW | 0.65% | 12% |
| Austria | EWO | 0.39% | 11% |
| Netherlands | EWN | -0.82% | 29% |
| Belgium | EWK | 0.20% | 25% |
| Spain | EWP | -1.22% | 32% |
| Italy | EWI | -1.85% | 19% |
| Greece | GREK | -3.86% | 25% |
| Poland | EPOL | 1.57% | 4% |
| Ireland | EIRL | -0.34% | 46% |
| Switzerland | EWL | 1.96% | 26% |
| Russia | RSX | 1.32% | -1% |
| Turkey | TUR | 4.05% | -27% |
| Egypt | EGPT | 2.10% | 7% |
| South Africa | EZA | 1.89% | -7% |
| China | FXI | 7.67% | -2% |
| India | EPI | 5.02% | -9% |
| Malaysia | EWM | 4.69% | 8% |
| Singapore | EWS | 3.85% | 0% |
| Indonesia | IDX | 5.78% | -23% |
| Thailand | THD | 1.77% | -15% |
| Vietnam | VNM | 5.42% | 8% |
| South Korea | EWY | 2.97% | 4% |
| Japan | EWJ | 1.54% | 26% |
| Australia | EWA | 2.66% | 2% |
| New Zealand | ENZL | 2.51% | 13% |
| United States | SPY | 1.88% | 32% |
| Canada | EWC | 2.01% | 5% |
| Mexico | EWW | 1.07% | -2% |
| Brazil | EWZ | 2.49% | -17% |
| Chile | ECH | 4.07% | -24% |
| Colombia | GXG | 4.26% | -15% |
| Argentina | ARGT | 2.95% | 15% |
| Peru | EPU | 5.82% | -25% |
The Bottom Line
There is not a clear cut relationship between a nation’s GDP growth and its equity market returns in a given year. In some instances, there is in fact a positive correlation, meaning that stronger GDP growth leads to higher returns for the nation’s equity market; however, in a handful of other cases, there is no direct link or even a negative correlation, meaning that the nations with the weakest economic growth can at times deliver the strongest equity market returns.
Follow me on Twitter @SBojinov
[For more ETF analysis, make sure to sign up for our free ETF newsletter]
Disclosure: No positions at time of writing.
