Ever since the exchange traded funds became available for private investors more and more people began looking outside their native countries and started to explore foreign ETFs. As the Western economies are struggling to provide attractive returns, foreign ETFs in emerging markets are offering a suitable alternative. As most financial advisors agree that diversification is the key to long term success foreign ETFs are great way to hedge risks agains local interest rate rises and fluctuating energy prices.
Below are some of the ways you could spread your risks globally-
Specific Foreign Market ETFs
These foreign ETFs target a certain country in their investment strategy, may it be China, India or Russia. Market ETFs track the overall performance of country’s economic situation, consisting of basket of stocks which are important to that specific location.
Some of the more well known options for these types of ETFs are Russia ETF (RSX), Italy (EWI), Spain (EWP), Mexico (EWW), and Australia (EWA) for example, each tracking the overall performance of each country.
Broad Foreign Market ETFs
If you are interested in broader market than just one single country there are plenty of broad foreign ETF options out there as well. Some of them include more countries than others-good sample is the BKF, which is following BRIC countries (Brazil, Russia, India and China).