These 5 Single Country ETF’s Still Have Room To Run
“Sometimes the best places to invest are in the scariest assets that have experienced the largest declines. Historically bear market declines are followed by bull markets. The greater the market crash, the greater the market recovery that follows it usually is. This is what David Dreman called investor overaction, when the economy is growing investors bid up equity prices too high, and when the economy is sour and the future is uncertain the market overreacts on the down side. This phenomena occurs in all asset classes, however stocks are the most affected since they are more volatile than must other assets classes. This phenomena is not unique to the United States, numerous studies have confirmed that foreign Investors overreact as much as American investors. For example the Russian stock maket declined about 83% from its peak in May 2008 until February 2009. This made Russia one of the worst performing equity markets during that time period. However since February the Russian Stock market has gone up 173% making it one of the best performing equity markets,” Jacob Wolinsky Reports From Guru Focus.
“Globally, nearly every stock market has experienced massive declines due to the global financial crisis. Most stock markets reached a Peak during October 2007 and continued to decline from a time period ranging from November 2008 until March 2009. Since that time period markets worldwide have went on to provide massive returns to investors. I decided to compile a chart detailing countries that have experienced massive stock market declines. These countries have went on to be some of the best performers subsequently. In the last column on my chart, I provided the percentage that the market is off its peak. This last column shows that while an investor may have missed the rally there still may be more room for returns. For example Russia is still off 50% from its peak reached in May 2008. However it is important to remember that if the market goes up 50% it will still not reach its peak, it has to increase by 100% to reach its previous peak. This furthers my cases that many of these markets still have ample room to move,” Wolinsky Reports.
“I only included countries that had an ETF that I could obtain sufficient information about. Iceland to my knowledge would make the list since it had a huge stock market decline and has probably been the country most affected by the global financial crisis. Iceland had a massive one day drop of 76% in October 2008 alone!, however there is no Iceland ETF and I therefore did not include Iceland in my table below. Ireland has an ETF symbol (IQE), however I could not locate sufficient data on the ETF and therefore had to omit it from the chart below. Therefore I only included the countries that had ETFs I could obtain information on. I did not include any regional ETFs (ie Latin America) I focused exclusively on country ETFs,” Wolinsky Reports.
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| Country | ETFSymbol | Peak To Trough %Decrease | % Increase FromTrough | % Off FromPeak |
| Russia | (RSX) | 82% | 185% | 51% |
| India | (INP) | 78% | 144% | 54% |
| China | (GXC) | 68% | 109% | 34% |
| Italy | (EWI) | 72% | 97% | 54% |
| Brazil | (EWZ) | 70% | 152% | 24% |
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Here are some details on the single country ETF’s below:
The investment (RSX) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal® Russia+ Index. The fund invests at least 80% of assets in stocks and Depositary Receipts of publicly traded companies domiciled in Russia. It normally invests at least 95% of assets in securities that comprise the index. The fund is nondiversified.
| TOP 10 HOLDINGS ( 60.84% OF TOTAL ASSETS) |
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The investment (INP) seeks to track the performance, before fees and expenses, of the MSCI India Total Return Index. The index is a free float-adjusted market capitalization index that is designed to measure the market performance of Indian securities. It is currently comprised of the top 68 companies by market capitalization listed on the Nation Stock Exchange of India. The fund is nondiversified.
The investment (GXC) seeks to replicate as closely as possible, before fees and expenses, the total return performance of S&P/Citigroup BMI China index based upon the Chinese equity market. The China index is a market capitalization weighted index that defines and measures the investable universe of publicly traded companies domiciled in China, but legally available to foreign investors. As of December 31, 2007, the China index was comprised of 313 stocks.
| TOP 10 HOLDINGS ( 49.86% OF TOTAL ASSETS) |
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The investment (EWI) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Italian market, as measured by the MSCI Italy index. The fund generally invests at least 90% of assets in the securities of its Underlying index and in depositary receipts representing securities in its Underlying index. It invests at least 80% of assets in the securities of the Underlying index or in DRs representing securities in its Underlying index. The index consists of stocks traded primarily on the Milan Stock Exchange. It is nondiversified.
| TOP 10 HOLDINGS ( 69.51% OF TOTAL ASSETS) |
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The investment (EWZ) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil index. The fund normally invests at least 95% of assets in the securities of its underlying index and in ADRs based on the securities in its underlying index. It uses a representative sampling strategy to try to track the index. The index consists of stocks traded primarily on the Bolsa de Valores de So Paulo. It is nondiversified.
| TOP 10 HOLDINGS ( 63.27% OF TOTAL ASSETS) |
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