This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Single-Country ETFs Get a Bad Rap

If you want to own Asia, your tolerance for volatility will tell you whether to stick with a regional fund or not. If you can take on single-country volatility, part of the process has to be deciding what country you want to own and the best way to capture that country -- a stock or investment product.

If you care about diversification, you are probably going to have more foreign exposure than just Asia, like maybe Europe or Australia. The best chance of success is exposure to many different countries that rely, economically, on different things, such as exports or internal growth. Blending different countries (or for some folks, regions) that react differently to certain events creates a zigzag effect that can reduce volatility in times of turmoil.

For example, the crash in Thailand last week would have a better chance of affecting Malaysia than it would Belgium.

I mention Belgium because the Globe and Mail article specifically picks on the iShares MSCI Belgium Index Fund (EWK) because 50% of the fund is in the top three holdings. While three stocks comprising 50% of a fund is far from ideal, there are not too many ways to narrowly invest in Belgium for people who want to. only lists four Belgian ADRs, and I was not able to find a traditional mutual fund that only invests in Belgium. For now, flawed as it may be, EWK could be the best way to own Belgium, but the Globe and Mail article never addresses that possibility.

Despite the impression given by the article, there are a number of better-diversified single-country ETFs out there. I would suggest doing some research on iShares France (EWQ), iShares Germany (EWG) or iShares Japan (EWJ) to see whether they are diversified enough to fill some holes in your investment portfolio.

There is no shortage of content to tell you not to invest in something, but I don't think people can learn from it. Do you really need someone to tell you a foreign stock is riskier than a country fund, which is itself riskier than a regional fund, which is riskier than iShares MSCI EAFE (EFA)? I don't think so. These all carry varying degrees of risk and require varying degrees of monitoring, but risk by itself is not much of a determinant of utility.

At the time of publication, Nusbaum held no positions in the stocks mentioned, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, Ariz., and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs