How To Use Single Country ETFs

August 17, 2017 How many ETFs do you own at once, and what are your largest positions?

Veksler: It's a pretty concentrated portfolio, so we usually use between 15 to 20 ETFs.
Chile and Peru, two commodity-producing countries, are our largest positions. We own the iShares MSCI Chile Capped ETF (ECH) and the iShares MSCI All Peru Capped ETF (EPU).

Stock markets of both countries are trading at below-average valuations. I believe both of them are likely to benefit from strengthening global economic growth, and especially, growth in China and the U.S., their largest and second-largest export destinations.

Just yesterday, the IMF increased its forecast of China's economic growth for the next five years (2017-2021) from 6 to 6.4%. The U.S. tax and infrastructure reforms, if passed, would be major catalysts for increased demand for copper and other commodities exported by these two countries. In general, we've seen a lot of interest in international equities and international equity ETFs this year as they've outperformed their U.S. counterparts. Do you think this international outperformance will continue?

Veksler: Yes I do; it’s a valuation play. The U.S. market is very expensive, so that's a driver for people to invest internationally.
Also, as global growth continues and strengthens, international markets and emerging markets are benefitting the most―especially the commodity-producing countries. It's part valuation story and part economic growth story.

Contact Sumit Roy at [email protected]


Find your next ETF

Reset All