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3 Bargain International ETFs for Investors

Though several international economies are slowing down, investors can take a look at these low P/E international ETFs for bargain picks.

Concerns about global growth have made a comeback. The IMF expects global growth for 2018-2019 to on par with the 2017 level of 3.7%, while the growth outlook for a number of major economies has been tapered.

The real GDP growth outlook for the United States for 2019 has been lowered to 2.5% due to the ongoing trade war with China. Real GDP for the Euro area will decline to 1.9% in 2019 compared with 2.9% in 2018.

Emerging and developing economies are in no better position. There are country-specific factors (for example in China), “tighter financial conditions, geopolitical tensions and higher oil prices,” which are going to impede economic growth of emerging economies.

Investors should also note that there has been a flare-up in U.S.-Sino trade tensions after the arrest of the CFO of Huawei — a Chinese tech behemoth — in Canada.  Moreover, there was a deeper-than-expected contraction in the Japanese economy in the third quarter. The economy returned to growth in Q2 but shrank in the first quarter of this year.

The Euro zone economy grew at its weakest clip in four years in the third quarter of 2018. China’s manufacturing activity also stalled in November. All these stirred global growth concerns again. (read: China's Manufacturing Stalls in November: ETFs in Focus).

The U.S. markets are reeling under pressure this year with Wall Street recording back-to-back market crashes since October. SPDR S&P 500 ETF SPY has lost about 8.8% in the past three months (as of Dec 7, 2018), mainly on rising rate concerns. With the Fed expected to enact its third hike this month, investors are likely to be on a cautious mode in the near term.

Against this scenario, investors seeking international exposure can consider the below-mentioned ETFs. These funds have considerably low P/E (much lower than 18.28x P/E of SPY) and offer good bargains.

Legg Mason International Low Volatility High Dividend ETF LVHI – 10.70x

The fund is composed of equity securities of developed markets outside the United States with relatively high yield and low price and earnings volatility while mitigating exposure to fluctuations between the values of the U.S. dollar and other international currencies. It yields 5.16% annually (read: 5 Low P/E Lucrative Value ETF Picks).

iShares Currency Hedged MSCI Emerging Markets ETF HEEM – 11.04x

The MSCI Emerging Markets 100% Hedged to USD Index represents a close estimation of the performance that can be achieved by hedging the currency exposure of its parent index. China, South Korea and Taiwan are the top three geographies of the fund (read: Turkey Issue Hurt EMs in August: 5 Least-Hurt ETFs).

iShares MSCI EAFE Value ETF EFV – 11.53x

The underlying MSCI EAFE Value Index includes securities from Europe, Australasia, Middle East and the Far East. The fund gives exposure to value ETFs. It yields 4.72% annually.

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LM-INT LV HD (LVHI): ETF Research Reports
SPDR-SP 500 TR (SPY): ETF Research Reports
ISHARS-CURR HDG (HEEM): ETF Research Reports
ISHARS-MS VL (EFV): ETF Research Reports
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