Rating Performance in the World of ETFs
I am a believer in accountability, therefore I'd like to revisit the investments I have written about on RealMoney.
A couple have worked out well; a couple have not. Nothing has blown up, but then, ETFs can't really drop 30% overnight.
Austrian banks are a prime source of financing for the expanding economies of Eastern Europe, and public pension money goes into the Austrian stock market on a regular basis.I felt that the ETF could be a less volatile proxy for emerging markets. The ETF has performed quite well, and I believe the underlying reasons to invest in it remain in force. The closest I have come to a hideous blowup is Iceland. When I wrote about it at the beginning of February, the risks included a hot stock market and currency, inflation concerns and its deficit. They all hit the fan at the same time and took the benchmark ICEX 15 Index down 12% from the time of my article, and 20% from its high. Similarly, the krona is down a little over 20% in the same time period, a huge move for a currency. There are clearly still problems, but the country isn't going to go out of business. I still view Iceland as a viable long-term theme. My exposure remains quite limited, as is appropriate in case everything hits the fan at once again. A stinker with a lot less drama was my article about Chile in December. I recommended The Chile Fund (CH), Banco Santander Chile (SAN)and Banco de Chile (BCH). Since then, all three have fallen about 5%, while the S&P 500 is up roughly 4%. What Chile has going for it is a bull market in copper and the fact that, as in Austria, public pension money goes into the stock market on a regular basis. Copper prices have gone up a lot and could be subject to a correction, but the demand for the metal remains quite healthy. In October I suggested that the iShares MSCI Taiwan Index Fund (EWT) offered a way to gain foreign exposure to the tech sector. The idea makes sense if you want foreign exposure for your portfolio in general terms but also if the dollar falls. From October to December, the dollar rallied, as measured by the Dollar Index, and so the ETF lagged domestic tech stocks, as measured by iShares Dow Jones U.S. Technology Sector Index Fund (IYW).
|Pulling Out of a Tie
EWT pulls ahead of the iShares Dow Jones U.S. Tech Index Fund
|Wet and Wild
The PowerShares Water Resources Portfolio (PHO) has outperformed the Industrial SPDR (XLI)
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