These Single-Country ETFs Beat SPY and Have Low PEs

Ferris Bueller would be pleased with these three funds.

Reviewed by: Kent Thune
Edited by: Lou Carlozo

A famous line from the 1986 movie Ferris Bueller’s Day Off goes like this: “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” Four decades later, that’s an apt observation for single-country ETFs and the investors and advisors who overlook them. 

That fact remains that last year, as in most years – and no matter how well the U.S. market did – several country markets did better. And while the SPDR S&P 500 ETF (SPY) sells at more than 20 times trailing earnings to start 2024, several ETFs that invest in a single nation’s stock market outperformed SPY in 2023 and currently sell at less than 10 times trailing earnings. Let’s do Ferris proud as we stop and look around at a few of them. 

Greece is the Word, GREK the Ticker 

The Global X MSCI Greece ETF (GREK) might cause chills to run up the spines of investors and advisors. After all, Greece stood at the center of the global economic mess not long ago. The nation’s economy practically went under as Greece’s debt was part of a larger pan-European crisis.  

But today, investors appear to have given a vote of confidence, judging by the 38% return in GREK last year versus 25% for SPY. Has that caused GREK’s 25 holdings in a $173 million portfolio to overheat in terms of valuation? Not at all.  

GREK still sells for only about seven times trailing earnings, and its portfolio has a weighted average debt-to-capital of just 39%. Yet plenty of investors didn’t look around and missed it. Unlike many big winners in 2023, this one did not end up with a valuation that would take it out of investors’ valuation screens. 

Cheap Single-Country ETFs That Beat SPY

The iShares MSCI Poland ETF (EPOL) has a similar story to tell; it was equally ignored in 2023 based on its $259 million asset base after more than 13 years since the fund was first listed. Poland found itself in a precarious position at the outset of the Russia-Ukraine war, given that it borders most of western Ukraine – including Lviv, one of Ukraine’s biggest cities. 

Yet EPOL surged 47% last year, nearly double the gain of SPY, and still sells for just a shade under eight times trailing earnings. It also yields 3%.  

And, the 23-years young iShares MSCI Brazil ETF (EWZ), a hefty $5.8 billion fund that trades $705 million a day in average volume, gained 33% in 2023, but retains a relatively inexpensive P/E ratio on trailing earnings of just above 7. EWZ dividend yields clock in at 4.82%. 

After years of dominance by the U.S. markets in the “ETF Olympics” versus other countries – and increasing concerns about the strength of the U.S. dollar – 2024 be the year advisors and investors finally rediscover the scores of single-country ETFs that span the globe.  

Life moves pretty fast, and markets move faster. If you don’t stop and look around once in a while, you could miss a world of bargains.  

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.