Many investors are heavy on U.S. assets and overlook international opportunities. However, with exchange traded funds, investors can diversify with global exposure and potentially generate higher yields.
U.S. investments still make up a large portion investors’ core portfolios, but an ETF like the SPDR S&P 500 ETF (SPY) only comes with a 2.02% 12-month yield.
Investors do not need to marry themselves to U.S. equities. Instead, one can look for overseas ETF opportunities.
Overseas exposure helps investors reduce home-country bias. For instance, European and emerging market equities outperformed U.S. stocks over the past month due to the U.S. government shutdown and default scare.
Moreover, a weak U.S. dollar bolstered international ETFs returns since country-specific ETF underlying assets are denominated in the local currency, strengthening overseas currencies would generate greater returns when converted back to the U.S. dollar.
For income investors, some country-specific ETFs also offer surprising dividend payouts as well. Here is our list of unexpected ETFs with unexpected yields: