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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Three ETFs to Bet on Global Recovery

Stocks in this article: EMT IPD SEA

By Michael Johnston of ETF Database

NEW YORK ( TheStreet) -- After a stellar start to the year, global equity markets hit a rocky stretch after a closer look at Europe's fiscal health uncovered cause for significant anxiety. Although equities have recovered somewhat from their recent plunge, pessimism runs rampant on Wall Street as the bears are coming out of the woodwork. The confidence that investors regained in the second half of 2009 has virtually disappeared as the short-term outlook has soured considerably.

And the sudden wave of pessimism over economic prospects has no shortage of justification. The pendulum in Europe has swung completely in the other direction, as governments are reeling in stimulus plans and imposing strict austerity measures. Analysts are warning that China may see "severe" employment losses next year when millions of temporary jobs created by a 4 trillion yuan stimulus package wrap up. And in the U.S., long-awaited job creation has finally materialized, but largely in the form of temporary jobs created by the census.

As the reality of the "new normal" sets in, hopes for another stellar year for equity markets have largely been dashed. A recent survey from economists at top U.S. financial firms revealed expectations for continued moderate economic growth and "painfully" slow job creation to ease an elevated unemployment rate. Although the panel downplayed the possibility of a double dip, it did cite a number of threats to economic growth, including a still-dismal real estate market, higher taxes, and stubbornly high unemployment.

Contrarian Plays

There are, of course, some contrarians out there who have taken advantage of the recent dip to snap up risky assets. Although the hurdles in the current environment are abundant, some believe that a resolution of the debt crisis in Europe could buoy confidence around the globe and give equity markets a push in the second half of the year.

While a full blown bull market rally seems unlikely, a steady climb higher is well within the realm of possibility. While such an optimistic scenario would boost risky assets around the globe, some stand to gain more than others. In the following pages, we highlight three equity ETFs that could be expected to turn in impressive performances if the final six months of 2010 proceed smoothly.

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