5 Best Performing Country ETFs of 2015

Unlike last year, 2015 has been lackluster for stocks across the world. This is especially true as Vanguard FTSE All-World ex-US ETF (VEU), targeting the international equity market, has lost about 3.9% so far this year compared with a loss of 2.6% for iShares MSCI ACWI ETF (ACWI), which targets the global stock market including the U.S.

The vicious trading in oil, slumping commodities, a strong dollar, Fed uncertainty and a slowdown in the global economy weighed on the stocks throughout the year. In particular, the Greece crisis engulfed the stock market for the most part of the first half and then China played the major culprit in the second half of the year. In addition, a few developed and developing economies suffered from slow growth amid streaks of volatility and uncertainty (see: all the World ETFs here).

Nevertheless, most of the international markets are still outperforming amid rounds of monetary easing that are stimulating growth in the economy and combating deflationary pressures. Given this, several country ETFs have not only delivered handsome returns this year but have also crushed the broad U.S. market fund (SPY).

Below, we have highlighted a few of these strong momentum plays, which could be interesting picks heading into the New Year.

Market Vectors China SME-ChiNext ETF (CNXT) – Up 45.7%

Despite spiraling woes and persistent weakness in the economy, this China ETF has performed exceptionally well overcoming all the hurdles. This fund offers exposure to the largest and most-liquid China A-share stocks listed and trading on the Small and Medium Enterprise (SME) Board and the ChiNext Board of the Shenzhen Stock Exchange by tracking the SME-ChiNext 100 index. It holds 101 stocks in its basket with none accounting for more than 3.9% share (read: 5 China ETFs Up At Least 20% in Q4).

About one-third of the portfolio is allotted to information technology, while industrials, consumer discretionary and health care round off the next three spots with double-digit exposure each. The product is unpopular with AUM of $60.6 million and average daily volume of more than 105,000 shares. It charges 66 bps in fees per year and has surged nearly 45.7% this year. CNXT has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook.

WisdomTree Japan Hedged Healthcare Fund (DXJH) – Up 34.4%

Since the Japanese economy again slipped into recession and yen has been on a downtrend, investors flocked to defensive sectors like healthcare while looking for a protection against the falling yen. DXJH targets the healthcare segment of the Japanese equity world without the currency risk. It follows the WisdomTree Japan Hedged Financials Index holding 57 stocks in its basket. The fund is highly concentrated on the top two firms – Takeda Pharmaceutical and Astellas Pharma – that make up for over 9% of assets each. Other firms hold less than 6.9% share (read: Japan in Technical Recession: Time to Buy ETFs on the Cheap?).

In terms of industrial exposure, pharma companies dominate the fund’s return at 62.3% followed by healthcare equipment at 14.1%. Though the product has a meager AUM of $20.4 million and trades in a paltry volume of around 15,000, it has returned a solid 34.4% this year. It charges investors 48 bps in annual fees and has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a High risk outlook.

iShares MSCI Ireland Capped ETF (EIRL) - Up 22.7%

Ireland has been on a strong recovery path abating year-long doldrums in construction due to the great Irish property crash. The fund tracks the MSCI All Ireland Capped Index and provides exposure to a small basket of 25 Irish stocks. The product is heavily concentrated on its top firm – CRH Plc – that alone accounts for less than one-fourth share in the basket while the next two firms – Kerry Group and Bank of Ireland – collectively make up for over 22.7% exposure. Other firms hold no more than 4.7% of assets.

From a sector look, materials takes the top spot at 26.4%, closely followed by consumer staples (24.5%), financials (17.4%) and industrials (15.7%). The ETF has amassed about $172.3 million in its asset base and sees moderate volume of around 61,000 shares a day. It charges 48 bps in fees per year from investors and has gained 22.7% this year. The fund has a Zacks ETF Rank of 3 with a Medium risk outlook.

iShares MSCI Denmark Capped ETF (EDEN) - Up 21.4%

Though Denmark is struggling with its own issues, it managed to show strong resilience in a volatile stock market. The ETF targeting this tiny Scandinavian country – EDEN - tracks the MSCI Denmark IMI 25/50 Index, holding 41 stocks in its basket. More than one-third of the portfolio is dominated by the health care sector with the top firm – Novo Nordisk – accounting for 23.2%. Other firms account for no more than 7.5% of assets while industrials and financials round off to the next two spots from the sector look (read: 5 ETFs Up At Least 10% This Year).
 
The fund has been able to manage $86.7 million in its asset base while sees a low volume of 34,000 shares a day on average. Expense ratio came in at 0.53%. The fund has returned about 21% in 2015 and has a Zacks ETF Rank of 3 with a Medium risk outlook.
 
iShares MSCI Belgium Capped ETF (EWK) – Up 15%

The Belgian economy is on track for modest growth with its country ETF gaining about 15% this year. The fund follows the MSCI Belgium IMI 25/50 Index, charging investors 48 bps in fees per year. It is rich in AUM of $238.4 million and trades in good volume of nearly 231,000 shares a day on average. Holding 41 stocks in its basket, the ETF is heavily concentrated on the top firm – Anheuser Busch Inbev – at 21.1%, while others hold no more than 7.6% of assets.

Consumer staples and financials takes the top two spots with 30.4% and 27.9%, respectively, while healthcare and materials round off the next two spots with double-digit exposure each. EWK has a Zacks ETF Rank of 3 with a Medium risk outlook.

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VANGD-FTSE AWLD (VEU): ETF Research Reports
 
ISHRS-MSCI ACWI (ACWI): ETF Research Reports
 
MKT VEC-CHINAMC (CNXT): ETF Research Reports
 
WISDMTR-JP HHCF (DXJH): ETF Research Reports
 
ISHARS-MS IRLND (EIRL): ETF Research Reports
 
ISHARS-MS DNMRK (EDEN): ETF Research Reports
 
ISHARS-BELGIUM (EWK): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
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