Domestic ETFs That Give Foreign Exposure

September 17, 2014

Foreign Sales On An Upswing

So, just how much foreign exposure do we have in the S&P 500, 400 and 600?

Results for 2012 show S&P 500 companies reported foreign sales as a percentage of total sales increased to 46.6 percent after three-consecutive years of declines. By comparison, foreign sales were at 47.9 percent in 2008. Just a decade ago, foreign sales were in the 30 percent range, according to data collected by the U.S. Bureau of Economic Analysis.

A breakdown geographically shows that Asian sales increased to 7.5 percent of all sales, up from 7.2 percent in 2011 and 6.1 percent in 2010.

Offsetting this increase, European sales declined to 9.7 percent of all S&P 500 sales compared with 11.1 percent in 2011 and 13.5 percent in 2010; U.K. representation declined to 1.7 percent from 2.4 percent in 2011; and European ex-U.K. sales declined to 8.0 percent, from 8.7 percent in 2011 and 12.0 percent in 2010. Canadian sales declined to 4.1 percent of all sales from 4.3 percent in 2011.

Foreign Sales By Sector And Size

On a sector basis, information technology continued to dominate the foreign component in 2012 in the S&P 500, with foreign sales at 58.3 percent, 56.5 percent in 2011 and 56.3 percent in 2010. The sector now represents 16.2 percent of all U.S. foreign sales.

Data from 2010 show that nine information technology companies had foreign sales in excess of 85 percent of all their sales, with Texas Instruments reporting 89 percent overseas sales and Qualcomm reporting 95 percent.

As noted, S&P MidCap 400 companies also have exposure to foreign sales, though less than S&P 500 firms, and companies in the S&P SmallCap 600 issues have foreign exposure as well, though less than those in the S&P MidCap 400. Among the reporting small-cap companies, 39 percent of all sales were produced and sold outside of the U.S., compared with 39.4 percent in 2011 and 37.5 percent in 2010.

Small-cap regional data show that European sales continued to increase, representing 9.3 percent of all S&P Small Cap 600 sales in 2012, up from 8.9 percent in 2011 and 8.68 percent in 2010. Small-cap Asian sales decreased, representing 9.1 percent of all sales, down from 9.4 percent in 2011, after increasing from 8.4 percent 2010. European sales ex-U.K. accounted for 7.3 percent, up from 7.2 percent in 2011 and 7.1 percent in 2010.

Consumer staples continued to be the most successful (and exposed) sector in terms of foreign sales. In 2012, 52.5 percent of its declared sales were foreign, up from 48.1 percent in 2011 and 45.9 percent in 2010.


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