10 Most Exotic Single Country ETFs

The world is your oyster. Well, at least it is via exchange traded funds. We’ve all heard the refrain that ETFs are reaching ever more far flung parts of the market, from Chinese money market instruments and solar companies to Belgian government bonds and that ultimate point of fascination – smart beta. But how often do investors consider the wealth of single country ETFs out there, which enable them to access equity markets in places as seemingly obscure as Chile and Korea?

These ETFs can present exciting opportunities, but investors should beware higher annual fees and concentration risk, compared to the mainstream equity markets.

Below ETF.com has listed 10 single country ETFs you may never have heard of, to whet your appetite for overseas markets as part of a diversified, long-term portfolio.

1) iShares MSCI Australia UCITS ETF (SAUS)

A hotspot for a holiday, but what of its equity market? This fund is down over 9 percent year to date (YTD), and has meagre gains of 3.1 percent over five years. It is heavily dominated with financial institutions - holdings include the Commonwealth Bank of Australia and Westpac Banking Corporation.

Nonetheless, the fund has grown to a significant $228 million under management since launch in 2010. Annual fees amount to 0.50 percent.

2) iShares MSCI Korea UCITS ETF (IKOR)

South, not North, investors will be glad to know. This fund has gained massive assets at over $725 million since it came to market in 2005. It has fallen 11 percent YTD, but clearly investors have not been deterred – despite the heavier price tag at 0.74 percent per year.

The top sector is information technology at 35 percent – with the top holding in Samsung Electronics at over a fifth of the fund.

3) iShares MSCI Poland UCITS ETF (SPOL)

Poland was the poster boy of the financial crisis – it fell, but quickly rebounded ahead of the rest of Europe. This fund hasn’t performed so well recently and is down 9.7 percent YTD – falling short of the iShares MSCI Eastern Europe Capped UCITS ETF’s 5 percent returns in the same timeframe. It is another fund with a price tag of 0.74 percent, which eats into returns.

Poland’s equity market is dominated by banks at 46.5 percent of the fund.

4) iShares MSCI Taiwan UCITS ETF (ITWN)

YTD returns are disappointing at minus 11.7 percent, but marginally better over five years at 3.1 percent. The $636 million fund will do its part to reassure investors of liquidity, but they will have to consider whether they want over a fifth of their fund to be in one company - Taiwan Semiconductor Manufacturing.

5) iShares MSCI Mexico Capped UCITS ETF (CMXC)

Beautiful sunshine and drug cartels aside, Mexico offers an equity market chock-a-block with consumer staples and telecommunications giants, with financial institutions only making up the third most dominant sector.

This fund is slightly cheaper than the previous ETFs at 0.64 percent per year, but has not seen as much asset growth at only $86 million since inception in 2010.

YTD this fund is down over 8 percent.

6) iShares MSCI Russia ADR/GDR UCITS ETF (CSRU)

Times have not been easy for Russia, what with economic sanctions and fighting in Ukraine.

Instead of investing directly in equities, this London-listed ETF invests in Russian companies via American Depositary Receipts and Global Depositary Receipts, owing to difficult access for foreign investors.

Despite plummeting markets – down 22 percent in three months – the fund still holds a healthy $322 million in assets. It costs 0.65 percent and focuses on energy stocks (58 percent of the fund).

7) iShares MSCI Chile UCITS ETF (CCL1)

The peppers may be hot, but this market is not – down over 12 percent YTD and 18 percent over three months. For 0.65 percent in fees, it takes a brave investor to take a bite.

What’s more, this fund is super concentrated at just 20 holdings, with almost a third in utilities.

8) db X-trackers MSCI Philippines IM TRN UCITS ETF (XPHG)

This $56 million fund tracks a stock market in its infancy, with just 45 holdings in the index, and the top holding is the Philippine Long Distance Telephone Company at 9.9 percent. Financials make up the heaviest sector, and YTD this ETF has fallen 4.8 percent.

9) db X-trackers MSCI Thailand TRN UCITS ETF (XCX4)

There is more to Thailand than tourism and beach parties – financial institutions are a much heavier play at 30 percent of this ETF. Watch out – this index only tracks 29 stocks.

Costing 0.50 percent per year, it has delivered negative returns of over 14 percent YTD.

10) db X-trackers FTSE Vietnam UCITS ETF (XFVT)

Our global travels continue to Vietnam and an index of just 16 stocks. If that doesn’t keep you on your toes, the 63 percent weighting in financial institutions will. Plus, it costs 0.86 percent per year. The fund has still grown to over $400 million since 2008 so has kept momentum amongst investors.

But YTD this fund has fallen 6.5 percent.