Far-Flung ETFs to Make a Portfolio Shine

Spanning the globe can lead to overlooked investment opportunities.

Reviewed by: etf.com Staff
Edited by: James Rubin

If there is one thing advisors can do to stand out among their peers, it is to do what most others won’t do.

That includes aspects of hands-on service, availability during off-hours and research to find unique ideas that investors are unlikely to hear elsewhere. To be sure, stuffing client portfolios with huge iconic tech stocks has helped performance since 2022, and T-bill exposure has provided the best “free lunch” in about 15 years.

But is that all there is? 

Like the old ABC Wide World of Sports television program of decades ago (before streaming or even cable), advisors can go “spanning the globe” for ideas. That may lead them to familiar non-U.S. destinations like China, Germany, Mexico, and the United Kingdom. But with so many international equity markets accessible through ETFs, analyzing other potential profit centers from “far, far away” is easy.

International ETFs to Explore in 2024 

Here are a few places most investors, and likely most advisory clients would not think to look. But advisors can. And thus, they can evaluate whether they might just be a missing link to better risk-adjusted returns. 

The iShares MSCI Finland ETF (EFNL) is a $22 million fund that has quietly traded on U.S. markets for more than 12 years. EFNL outpaced the MSCI EAFE index for most of its first decade but has fallen back in the past few years. That leaves it trading at a 50% dividend premium to that index, with EFNL at 4.4% versus 2.9% for EAFE, which is represented by the iShares MSCI EAFE Index ETF (EFA). EFNL trades at 15 times trailing 12-month earnings, just a slight premium to EFA. It has a highly concentrated portfolio with 10 stocks accounting for about two-thirds of assets. That allows advisors to easily drill down to see what they own.

The VanEck Egypt Index ETF (EGPT) is a $26 million fund that requires that a stock holding derive at least half its revenue from business in Egypt, which has made news recently as it tries to help broker an easing of tensions in the Israel-Hamas war. In 2011, when Mideast turmoil spiked in Egypt, VanEck halted creation of new shares of EGPT temporarily. This ETF debuted in 2010. 

In case advisors doubt the value of hunting in uncommon places, since the global stock market peak on Feb. 19, 2020—the outset of the COVID pandemic— EGPT has outperformed the famous ARK Innovation Fund (ARKK) by 33%. EGPT is up 13% during that time, while ARKK is down 20%.

EGPT is also up 63% the past 12 months and already ahead more than 17% in 2024. 

Who’s “innovative” now? 

Investing in the new frontier 

And for those seeking to diversify abroad while also diversifying that non-U.S. exposure, there’s the $420 million iShares Frontier and Select EM (FM), whose ticker symbol stands for “frontier markets.” Those markets are sufficiently small and undeveloped enough so that they are considered less mature than even emerging markets.

FM includes allocations to frontier stock markets such as Viet Nam, Kazakhstan, Romania, Morocco, and Bangladesh. This unique ETF spreads its risk across more than 170 stocks and trades at a skinny 10.4 times trailing earnings. FM has outperformed the U.S.-based Russell 2000 small cap index over the past three years.

There’s a whole wide world of ETFs out there. And what clients don’t know can not only help their portfolios, but also advisors looking to shine by going the extra mile.

Or in this case, thousands of miles.

Rob Isbitts was an investment advisor for 27 years before selling his practice to focus on ETF research and education. He is based in Weston, Florida. Contact him at  [email protected] and follow him on LinkedIn.