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All-World ETFs Signal Downtrend for Foreign Stocks

VTI 50 Day Slope

In contrast, all-world ETFs from Vanguard All World excluding U.S. (VEU) to iShares MSCI All World excluding U.S. (ACWX) paint a different picture. The negative slope reading of -.04 over the 50-day time frame defines a near-term downtrend for foreign stocks. What’s more, the current price of VEU is well below a 50-day moving average.

VEU 50 Slope

For our clients, we’ve had negligible exposure to developed world equities outside the U.S. since 2010. Yet we’ve used stop-limit loss orders and trend identification to reduce our exposure to emerging (developing world) stock ETFs here in 2012.

Indeed, U.S. equities are the premier “hold” at this moment. We still maintain our positions in Vanguard High Dividend Yield (VYM), Vanguard REIT ETF (VNQ) and Vanguard Dividend Appreciation (VIG).

Yet the best investments… and I’ve been saying this for more than a month now… may be those ETFs with historically wide yield spreads with comparable Treasury bonds. SPDR Barclays Corporate High Yield (JNK)), JP Morgan Alerian MLP (AMJ), Claymore Multi-Asset Income (CVY) and iShares Intermediate Corporate Credit (CIU) continue to produce income with less price volatility.

You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod. You can follow me on Twitter @ETFexpert.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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