Using Single-Country ETFs to Preserve Assets

Can single-country ETFs help save your portfolio from U.S. doldrums?

The investment world has been undergoing a change during this decade-long round trip to nowhere currently being endured by the S&P 500. The streak is currently about 10 years long, but the prospect of a round trip to nowhere for two decades isn't so far-fetched.

There is no way to know if this will be the case but with never-ending deficits, the economic ascension of countries like China, India and Brazil and the visibility for more commerce to be transacted away from the U.S. dollar it is possible.

This would make foreign investing all the more important and to that point I tried to construct a reasonably well diversified portfolio with a simplistic method using just single-country ETFs that might bail out U.S.-based investors if the trend of below-normal equity returns in the U.S. persists.

Those ETFs are:

Wisdom Tree Total Earnings ETF(EXT Quote)

iShares MSCI Canada(EWC Quote)

iShares MSCI Australia(EWA Quote)

iShares MSCI Germany(EWG Quote)

iShares MSCI Switzerland(EWL Quote)

Market Vectors Russia(RSX Quote)

iShares MSCI Taiwan(EWT Quote)

iShares MSCI Israel(EIS Quote)

iShares MSCI Brazil(EWZ Quote)

SPDR S&P China(GXC Quote)

The funds were all equal-weighted at 10% of the portfolio. So, this would be 90% foreign and 10% U.S.

An obvious question would be: Why not just put a lot of money into MSCI iShares EAFE Index Fund(EFA Quote) instead of buying all of the above funds. EFA has 22% in the U.K. -- which, depending on what you read, may grow more slowly and face bigger economic problems than the U.S.

EFA is 19% in Japan, which has broken more hearts (how people every January say this is Japan's year?) than any investment destination I can think of as it continues to digest the excesses of the late 1980s.