Top 10 Large-Cap International ETFs

There is a fast growing number of international large-cap ETFs with some only recently being issued. This is one sector where growth in the number of issues available will grow quickly along with other international subsectors. Currently there are about 40 issues available with not all of them seasoned yet.

The issues in the list are from a variety of issuers including: iShares, SPDRs, Van Eck, Schwab, Guggenheim, WisdomTree and so forth. These are linked to proprietary indexes or Dow Jones, S&P, Russell, Van Eck and others.

Over the past few years there has been a push and desire to add more international issues to investor portfolios. This has occurred because many developing countries are experiencing higher economic growth rates than more developed countries. Demographics in some emerging markets is superior given a younger population making the consumer sector compelling as well as infrastructure needs. However, historically many international markets have higher volatility characteristics than more established sectors. In 2011 a global debt crisis emerged causing many developed nation's markets, particularly in Europe, to experience unusually high volatility and underperformance. This is something that has negatively affected many of the featured ETFs in this category.

Irrespective of recent market performance we rank the top 10 ETFs more by their structure as opposed to current performance. We utilize our proprietary stars system as outlined below. If an ETF you're interested in is not included but you'd like to know a ranking send an inquiry to support@ETFDigest.com and we'll attempt to satisfy your interest.


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions. These are highlighted by rectangular images in many of the charts that follow.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

#1: iShares EAFE ETF (EFA)

 

EFA follows the MSCI EAFE Index which measures the performance of equity markets in Europe, Australasian and Far Eastern markets. The fund was launched in August 2008. The expense ratio is .35%. AUM (Assets under Management) equal $35 billion making it one of the largest ETFs by assets. Average daily trading volume is 27M shares. As of late December 2011 the annual dividend yield was 3.45% and YTD return was -13.40%.

Data as of December, 2011

EFA Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 2.00%
  2. HSBC Holdings PLC (HBCYF): 1.54%
  3. Vodafone Group PLC (VODPF): 1.41%
  4. BP Plc (BP.): 1.38%
  5. Novartis AG (NVSEF): 1.31%
  6. Royal Dutch Shell PLC (RDSA): 1.27%
  7. BHP Billiton Ltd (BHPLF): 1.26%
  8. GlaxoSmithKline PLC (GLAXF): 1.15%
  9. Roche Holding AG (RHHVF): 1.15%
  10. Total SA (FP): 1.10%

 

#2: Vanguard Europe Pacific Profile (VEA)

VEA follows the MSCI EAFE Index which measures the performance of equity markets in Europe, Australasian and Far Eastern markets. The fund was launched in July 2007. The expense ratio is .12% which is much lower than EFA following the same index. AUM equal $6 billion and average daily trading volume is over 2M shares.  As of late December 2011 the annual dividend yield was 3% and YTD return was -15%. (Holdings seem to vary slightly from EFA which may be due to reporting dates.)

Data as of December, 2011

VEA Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 2.07%
  2. HSBC Holdings PLC (HBCYF): 1.48%
  3. Vodafone Group PLC (VODPF): 1.44%
  4. Novartis AG (NVSEF): 1.42%
  5. Roche Holding AG (RHHVF): 1.24%
  6. BP Plc (BP.): 1.23%
  7. GlaxoSmithKline PLC (GLAXF): 1.17%
  8. BHP Billiton Limited (BHPLF): 1.16%
  9. Royal Dutch Shell PLC (RDSA): 1.15%
  10. Toyota Motor Corporation (7203): 1.04%

 

#3: iShares Canada ETF (EWC)

EWC follows the MSCI Canada Index which measures the Canadian equity market. This seems simplistic and obvious but MSCI doesn't release many details beyond these statements. The fund was launched in March 1996. The expense ratio is .53%. AUM equal $4.3 billion and average daily trading volume is nearly 3M shares. As of late December 2011 the annual dividend yield was 2% and YTD return was -14.20%.

Data as of December, 2011

EWC Top Ten Holdings & Weightings
  1. Royal Bank of Canada (RY): 5.73%
  2. Toronto Dominion Bank: 5.50%
  3. Bank of Nova Scotia (BNS): 4.67%
  4. Suncor Energy, Inc. (SU): 4.12%
  5. Barrick Gold Corporation (ABX): 4.06%
  6. Potash Corporation of Saskatchewan, Inc. (POT): 3.33%
  7. Goldcorp, Inc.: 3.20%
  8. Canadian Natural Resources, Ltd. (CNQ): 3.17%
  9. Bank of Montreal (BMO): 3.09%
  10. Canadian National Railway Company (CNI): 2.94

 

#4: iShares MSCI Value ETF (EFV)

EFV follows the MSCI EAFE Value Index which measures the performance of stocks in European, Australasian, and Far Eastern markets that represent value characteristics. The fund was launched in August 2005. AUM is over $1 billion and average daily trading volume is 224K shares. As of late December 2011 the annual dividend yield was 4.50% and YTD return was -14%.

Data as of December, 2011

EFV Top Ten Holdings & Weightings
  1. Vodafone Group PLC (VODPF): 2.84%
  2. BP Plc (BP.): 2.79%
  3. Novartis AG (NVSEF): 2.64%
  4. Royal Dutch Shell PLC (RDSA): 2.56%
  5. GlaxoSmithKline PLC (GLAXF): 2.31%
  6. Total SA (FP): 2.22%
  7. Royal Dutch Shell PLC B (RDSB): 1.91%
  8. Telefonica SA (TEF): 1.75%
  9. Commonwealth Bank of Australia (CBA): 1.61%
  10. Sanofi (SAN): 1.60%

 

#5: iShares DJ EPAC Dividend ETF (IDV)

IDV follows the Dow Jones EPAC Select Dividend Index which measures the performance of a selected group of companies that have provided relatively high dividend yields on a consistent basis over time. The fund was launched in June 2007. The expense ratio is .50%. AUM equal $660 million and average daily trading volume is 346K shares. As of late December 2011 the annual dividend yield was 5.60% and YTD return was -7.76%/

Data as of December, 2011

IDV Top Ten Holdings Weightings
  1. Eni SpA (ENI): 5.01%
  2. British American Tobacco PLC (BATS): 4.71%
  3. Commonwealth Bank of Australia (CBA): 4.49%
  4. Royal Dutch Shell PLC (RDSA): 4.04%
  5. SSE Plc. (SSEZF): 3.04%
  6. Provident Financial PLC (PFG): 2.78%
  7. National Australia Bank Limited (NAB): 2.43%
  8. Westpac Banking Corp (WBC): 2.10%
  9. Hennes & Mauritz AB (HM B): 2.07%
  10. Neopost (NEO): 2.04%

 

#6: SPDR S&P International Dividend ETF (DWX)

DWX follows the S&P International Dividend Opportunities Index which generally includes 100 tradable, exchanged listed common stocks from around the world that offer high dividend yields. The fund was launched in February 2008. The expense ratio is .45%. AUM equal $596M and average daily trading volume is 187K shares. As of late December 2011 the annual dividend yield was 7.10% and YTD return was -12%.

Data as of December 2011

DWX Top Ten Holdings & Weightings
  1. Tele2 AB (TEL2 B): 3.60%
  2. ASX Limited (ASX): 3.31%
  3. Telefonica Brasil S.A. ADR (VIV): 3.28%
  4. Seven West Media Limited (SWM): 2.86%
  5. Rwe AG (RWE): 2.79%
  6. Fred. Olsen Energy ASA (FOE): 2.40%
  7. Orient Overseas (International) Ltd. (00316): 2.39%
  8. Spark Infrastructure Group (SKI): 2.28%
  9. Marine Harvest ASA (MHG): 2.15%
  10. E.ON Aktiengesellschaft (EOAN): 2.12%

#7: Schwab International Equity ETF (SCHF)

 

SCHF follows the FTSE Developed ex-U.S. Index which is comprised of approximately 85% large-cap stocks and 15% mid-cap stocks from more than 20 developed international markets. The fund was launched in November 2009. The expense ratio is .13% putting it at the low end of such charges. AUM equal $600 million and average daily trading volume is 170K shares. (Schwab clients trade commission free at Schwab) As of late December 2011 the annual dividend was 3.20% and YTD return was -12.75%.

 

Data as of December, 2011

SCHF Top Ten Holdings & Weightings
  1. Nestle SA (NESN): 1.65%
  2. Vodafone Group PLC (VODPF): 1.19%
  3. Samsung Electronics Co Ltd (BC94): 1.15%
  4. HSBC Holdings PLC (HBCYF): 1.13%
  5. BP Plc (BP.): 1.12%
  6. Novartis AG (NVSEF): 1.09%
  7. Royal Dutch Shell PLC (RDSA): 1.06%
  8. GlaxoSmithKline PLC (GLAXF): 0.96%
  9. BHP Billiton Limited (BHPLF): 0.92%
  10. Total SA (FP): 0.91%

 

 

 

#8: Wisdom Tree DEFA ETF (DMW)

 

DWM follows the Wisdom Tree Dividend Index of Europe, Far East Asia and Australasia. The Index is a fundamentally weighted Index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada and the United States, that pay regular cash dividends and that meet other liquidity and capitalization requirements. It is comprised of companies incorporated in 16 developed European countries, Japan, Australia, New Zealand, Hong Kong and Singapore. Companies are weighted in the Index based on annual cash dividends paid. The fund was launched in June 2006. The expense ratio is .48%. AUM equal $325 million and average daily trading volume is 60K shares. As of late December 2011 the annual dividend yield was 4.57% and YTD return was -12%.

 

Data as of December 2011

DWM Top Ten Holdings & Weightings
  1. Vodafone Group PLC (VODPF): 1.79%
  2. China Mobile Ltd. (00941): 1.73%
  3. Telefonica SA (TEF): 1.60%
  4. Total SA (FP): 1.57%
  5. Nestle SA (NESN): 1.45%
  6. GlaxoSmithKline PLC (GLAXF): 1.43%
  7. Commonwealth Bank of Australia (CBA): 1.36%
  8. Westpac Banking Corp (WBC): 1.32%
  9. Roche Holding AG (RHHVF): 1.30%
  10. Royal Dutch Shell PLC (RDSA): 1.29%

#9: Wisdom Tree International Dividend ex-Financials ETF (DOO)

DOO follows the Wisdom Tree International Dividend ex-Financials Index.The Index measures the performance of high dividend-yielding international stocks outside the financial sector. The index consists primarily of large- and mid-capitalization companies incorporated in Europe, Japan, Australia, New Zealand, Hong Kong and Singapore that pass WisdomTree Investments market capitalization, liquidity and selection requirements. The fund was launched in June 2006. The expense ratio is .58%. AUM equal $248 million and average trading volume (commission free at ETrade) is 118K shares. As of late December 2011 the annual dividend yield was 4.60% and YTD return was -8.40%.

 

Data as of December, 2011

DOO Top Ten Holdings & Weightings
  1. Telstra Corp Ltd (TTRAF): 3.34%
  2. Foster's Group Limited (FGL): 2.45%
  3. Belgacom SA (BELG): 2.10%
  4. Nokia Oyj (NOK1V): 2.00%
  5. France Telecom SA (FTE): 1.90%
  6. Telefonica SA (TEF): 1.78%
  7. E.ON Aktiengesellschaft (EOAN): 1.71%
  8. Koninklijke (Royal) KPN NV (KPN): 1.66%
  9. Amcor Limited (AMC): 1.65%
  10. Rwe AG (RWE): 1.64%

#10: PowerShares FTSE RAFI Developed Markets ETF (PXF)

 

PXF follows the FTSE RAFI Developed Markets ex-U.S. Index. The Index is designed to track the performance of the largest developed market equities (excluding the U.S.), selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. The fund was launched in June 2007. The expense ratio is .75%. AUM equal $230 million and average daily trading volume is 62K shares. As of late December 2011 the annual dividend yield was 2.20% and YTD return was -15.90%.

Data as of December, 2011

PXF Top Ten Holdings & Weightings
  1. BP PLC (BP.): 2.17%
  2. Vodafone Group PLC (VODPF): 1.64%
  3. Royal Dutch Shell PLC (RDSA): 1.57%
  4. Total SA (FP): 1.52%
  5. ING Groep N.V. (INGA): 1.48%
  6. HSBC Holdings PLC (HBCYF): 1.47%
  7. Royal Dutch Shell PLC B (RDSB): 1.22%
  8. GlaxoSmithKline PLC (GLAXF): 1.03%
  9. Nestle SA (NESN): 0.97%
  10. Banco Santander SA (SAN): 0.97%

 

As indicated there has been a big push to globalize investor portfolios and this hasn't been lost on ETF sponsors. Nevertheless when markets were in good shape this proved rewarding but when things went badly conditions were much worse in these markets. This is a major reason we rely on discipline and technical indicators to keep us out of harms way.

It's also important to remember that ETF sponsors have their own competitive business interests when issuing products which may not necessarily align with your investment needs. New ETFs from highly regarded and substantial new providers are also being issued. These may include Charles Schwab's ETFs and Scottrade's Focus Shares which both are issuing new ETFs with low expense ratios and commission free trading at their respective firms. These may also become popular as they become seasoned. 

For further information about portfolio structures using technical indicators like DeMark and other indicators, take a free 14-day trial at ETF Digest . Follow us on Twitter and Facebook as well and join our group conversations.

You may address any feedback to: feedback@etfdigest.com   

The ETF Digest has no current positions in the featured ETFs.

(Source for data is from ETF sponsors and various ETF data providers)

 
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Dave Fry is founder and publisher of ETF Digest, Dave's Daily blog and the best-selling book author of Create Your Own ETF Hedge Fund, A DIY Strategy for Private Wealth Management, published by Wiley Finance in 2008. A detailed bio is here: Dave Fry.

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