International ETF Portfolio For June (EUM, UUP, UDN)

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June 8, 2011 1:33pm NYSE:EUM NYSE:UDN

Each month I update a momentum based ranking system of individual country ETFs.  Historical studies have shown that momentum based strategies have performed well over time; thus, each


 month I put a variety of these strategies to the test on Scott’s Investments. Below is a table ranking a diverse list of individual country ETFs  based on the average of their 3, 6, and 12 month returns.  This list is tracked monthly on the right hand side of my blog Scott’s Investments

This strategy is now tracked real-time as a hypothetical portfolio with a starting balance of $10,000 at the start of 2011.  The advantage is to provide a more realistic portfolio experience.  To view the returns and portfolio, simply click on “2011 International ETF” portfolio on the right hand side of Scott’s Investments. The new tracking system also provides a easy tracking of transactions. 

It is tempting to rename the International ETF Portfolio the “Stinker Portfolio”. The strategy has been a disappointment for 2011.  If you are worried about market drawdowns, two options to improve this strategy would be to use ETFReplay.com to screen for international ETFs that also have low volatility coupled with high momentum. Also, long positions in often volatile emerging markets could be coupled with a higher cash position or a position in an inverse, international focused ETF such as ProShares Short MSCI Emerging Markets (NYSE:EUM).

An additional concern when investing in international ETFs is the role of currency conversion in affecting returns.  Movements in the US Dollar can impact the returns of these ETFs since funds need to be exchanged when purchasing securities abroad.  There are some “dollar neutral” mutual funds and ETFs that attempt to invest internationally and hedge currency risk.  However, with currency hedging an investor may also miss some of the benefit, or gains, of currency exposure. Nevertheless, investors should be aware of the impact (both positive and negative) exchange rates have on returns and that the option for hedging currency exposure exists. PowerShares DB US Dollar Index Bullish (NYSE:UUP) and PowerShares DB USD Bear ETF (NYSE:UDN) are two options for hedging positive or negative moves in the US Dollar.

Symbol Name Quarterly 6 Month Year Average 200 Day SMA
EWY iShares MSCI South Korea Index 15.40% 23.29% 52.24% 30.31% 12.87%
EWD iShares MSCI Sweden Index 10.67% 22.57% 53.70% 28.98% 14.11%
EWL iShares MSCI Switzerland Index 11.22% 22.61% 46.34% 26.72% 15.65%
THD iShares MSCI Thailand Invest Mkt Index 10.61% 8.19% 55.04% 24.61% 7.39%
IDX Market Vectors Indonesia Index ETF 16.48% 10.09% 43.84% 23.47% 10.44%
EWQ iShares MSCI France Index 6.28% 23.00% 39.98% 23.09% 11.45%
EWP iShares MSCI Spain Index 4.80% 26.51% 37.24% 22.85% 7.95%
EWO iShares MSCI Austria Investable Mkt Idx 4.35% 18.65% 44.96% 22.65% 8.73%
EWG iShares MSCI Germany Index 6.26% 18.35% 42.89% 22.50% 11.83%
IDV iShares Dow Jones Intl Select Div Idx 6.06% 17.13% 43.88% 22.36% 10.16%
BRF Market Vectors Brazil Small-Cap ETF 12.27% 5.23% 47.98% 21.83% 6.60%
EWT iShares MSCI Taiwan Index 6.92% 14.20% 43.80% 21.64% 9.41%
DEM WisdomTree Emerging Markets Equity Inc 9.46% 12.49% 42.75% 21.57% 8.54%
EWK iShares MSCI Belgium Investable Mkt Idx 8.97% 19.60% 34.56% 21.04% 10.40%
SCZ iShares MSCI EAFE Small Cap Index 3.80% 17.11% 40.34% 20.42% 9.73%
FXF CurrencyShares Swiss Franc Trust 8.87% 17.02% 35.13% 20.34% 11.27%
EWA iShares MSCI Australia Index 4.66% 14.53% 40.63% 19.94% 8.01%
DGS WisdomTree Emerging Mkts SmallCap Div 10.48% 7.80% 40.51% 19.60% 5.78%
EWI iShares MSCI Italy Index 2.59% 20.96% 34.78% 19.44% 6.96%
EWM iShares MSCI Malaysia Index 7.25% 11.62% 38.10% 18.99% 7.30%
EZA iShares MSCI South Africa Index 7.26% 9.73% 36.53% 17.84% 6.99%
EWU iShares MSCI United Kingdom Index 3.84% 15.47% 34.05% 17.79% 7.93%
EWS iShares MSCI Singapore Index 8.48% 8.98% 35.11% 17.52% 6.17%
ECH iShares MSCI Chile Investable Mkt Idx 11.80% 0.29% 40.33% 17.47% 4.61%
IGF iShares S&P Global Infrastructure Index 3.77% 14.40% 34.24% 17.47% 8.46%
DLS WisdomTree International SmallCap Div 2.36% 14.85% 35.09% 17.43% 7.95%
FXA CurrencyShares Australian Dollar Trust 6.42% 12.67% 32.68% 17.26% 8.56%
GXG Global X/InterBolsa FTSE Colombia 20 ETF 6.02% 7.18% 37.46% 16.89% 3.55%
EWN iShares MSCI Netherlands Invstbl Mkt Idx 2.02% 17.84% 30.72% 16.86% 7.14%
EWH iShares MSCI Hong Kong Index 4.57% 3.62% 37.26% 15.15% 4.39%
RSX Market Vectors Russia ETF -4.14% 12.34% 34.28% 14.16% 5.05%
GAF SPDR S&P Emerging Middle East & Africa 6.82% 5.99% 27.73% 13.51% 5.08%
EWC iShares MSCI Canada Index -1.70% 12.94% 28.57% 13.27% 7.83%
EWW iShares MSCI Mexico Investable Mkt Idx 3.31% 6.22% 30.24% 13.26% 6.17%
WIP SPDR DB Intl Govt Infl-Protected Bond 4.30% 11.51% 22.28% 12.70% 6.51%
ENZL iShares MSCI New Zealand Invstb Mkt Idx 17.65% 19.58% 0.00% 12.41% 15.29%
GXC SPDR S&P China 8.16% 4.34% 24.58% 12.36% 4.39%
FXE CurrencyShares Euro Trust 4.57% 9.71% 17.53% 10.60% 5.26%
FXI iShares FTSE China 25 Index Fund 7.59% 3.89% 19.74% 10.41% 4.38%
BWX SPDR Barclays Capital Intl Treasury Bond 4.47% 9.50% 16.70% 10.22% 4.62%
EWZ iShares MSCI Brazil Index 2.86% 3.08% 23.90% 9.95% 1.72%
EIS iShares MSCI Israel Cap Invest Mkt Index 3.79% 3.32% 20.44% 9.18% 1.49%
ISHG iShares S&P/Citi 1-3 Yr Intl Treasury Bd 2.52% 7.88% 15.81% 8.74% 4.05%
IGOV iShares S&P/Citi Intl Treasury Bond 3.65% 7.55% 14.58% 8.59% 3.38%
HAO Guggenheim China Small Cap 4.56% -5.23% 24.15% 7.83% -1.54%
TUR iShares MSCI Turkey Invest Mkt Index 10.63% -6.81% 18.00% 7.27% -7.23%
DBV PowerShares DB G10 Currency Harvest 4.03% 6.45% 10.24% 6.91% 4.58%
EMB iShares JPMorgan USD Emerg Markets Bond 4.73% 3.44% 12.31% 6.83% 2.54%
EPU iShares MSCI All Peru Capped Index -7.30% -9.06% 36.73% 6.79% -2.10%
FXB CurrencyShares British Pound Sterling Tr 1.13% 5.49% 12.02% 6.21% 3.09%
PICB PowerShares International Corporate Bond 5.62% 10.07% 0.00% 5.23% 5.56%
CEW WisdomTree Dreyfus Emerging Currency 3.39% 2.30% 9.04% 4.91% 1.89%
FXY CurrencyShares Japanese Yen Trust 0.38% 3.09% 11.21% 4.89% 1.29%
FXC CurrencyShares Canadian Dollar Trust 0.65% 5.21% 8.81% 4.89% 3.10%
EMLC Market Vectors EM Local Curr Bond ETF 5.85% 8.14% 0.00% 4.66% 4.92%
PIN PowerShares India 2.74% -1.85% 12.55% 4.48% -3.45%
ELD WisdomTree Emerging Markets Local Debt 6.22% 7.20% 0.00% 4.47% 4.81%
SCJ iShares MSCI Japan Small Cap Index -7.83% 7.50% 11.60% 3.76% 2.25%
EWJ iShares MSCI Japan Index -10.77% 0.20% 9.02% -0.52% -1.12%
VNM Market Vectors Vietnam ETF -13.99% -15.59% -14.17% -14.58% -17.16%
 

Written By Scott’s Investments   Disclosure: No positions

Scott’s Investments focuses on several different ETF portfolio strategies ranging from Basic, Individual, Country, US Sector, and Global Sector ETF portfolios.


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