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5 International ETFs That Lost Less Than SPY on Trade Worry

Sanghamitra Saha

As the U.S.-Sino trade war escalated to a new level last week, Wall Street bled on Aug 23. SPDR S&P 500 ETFSPY (down 2.6%), SPDR Dow Jones Industrial Average ETF DIA (down 2.4%) and Invesco QQQ Trust QQQ (down 3.2%) — all lost heavily on Aug 23. Volatility product iPath Series B S&P 500 VIX Short-Term Futures ETN VXX added about 12.5% on Aug 23.

China levied a round of retaliatory tariffs on U.S. goods worth $75 billion in the range of 5% to 10%, which is set to be enacted on Sep 1. The latest move by China came after the U.S. government announced on Aug 1 that it is levying a 10% tariff to $300 billion worth of Chinese goods. Though Washington delayed some of those tariffs on Aug 13, saying they will be enacted in two tranches: on Sep 1 and Dec 15, the announcement prompted China to counteract.

After markets closed in the United States on Aug 23, Trump said “he would raise tariffs on $250 billion in Chinese exports to 30% from 25% in October, and that the tariffs kicking in next week will now be 15%, rather than 10%.” The first lot of those tariffs will be introduced in September (read: Consumer ETFs in Focus on Fresh Tariff Threats).

Such hostility in terms of tariff caused a bloodbath in Wall Street. Global markets were also not spared as in an open economy most countries are related to each other one way or the other. Still, many developed country ETFs lost lesser than the S&P 500 on Aug 23 and traded at a considerably higher volume.

And why not? Several global markets are going to benefit from an easy monetary policy. Amid global growth concerns sparked by unceasing trade tensions and China’s yuan devaluation, aggressive rate cuts among global central banks have been rife. Recently, central banks in New Zealand, India, Thailand, South Korea, Indonesia, Peru, Turkey and South Africa resorted to rate cuts in order to keep an impending slowdown at bay (read: Play Global Bond ETFs to Join Central Banks' Rate Cut Euphoria).

Against this backdrop, below we highlight a few international ETFs that fared better than many U.S.-based ETFs amid re-escalation of tariff tensions. These funds recorded high relative volume on Aug 23.

Invesco S&P International Developed Low Volatility ETF IDLV; Relative Volume: 7.45

The underlying S&P BMI International Developed Low Volatility Index is compiled, maintained and calculated by Standard & Poors and consists of the 200 least-volatile stocks of the S&P Developed ex. US and South Korea LargeMid Cap BMI Index over the past 12 months. The fund is heavy on Canada and Japan. It charges 25 bps in fees and yields about 2.87% annually. It lost only 0.5% on Aug 23.

WisdomTree International Dividend ex-Financials Fund DOO;Relative Volume: 12.05

The underlying WisdomTree International Dividend ex-Financials Index measures the performance of high dividend-yielding international stocks outside the financial sector. United Kingdom (22.04%) and Japan (20.54%) are the top two countries of the fund. The fund charges 58 bps in fees and yields 4.29% annually. It lost 1.3% on Aug 23.

Invesco DWA Developed Markets Momentum ETF (PIZ); Relative Volume: 5.80

The Dorsey Wright Developed Markets Technical Leaders Index includes approximately 100 companies that possess powerful relative strength characteristics and are domiciled in developed markets including, but not limited to Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, and New Zealand. The fund charges 80 bps in fees. Itlost 1.5% on Aug 23.

SPDR Dow Jones International Real Estate ETF (RWX); Relative Volume: 3.37

The underlying Dow Jones Global ex-U.S. Real Estate Securities Index is a float adjusted market capitalization index designed to measure the performance of publicly traded real estate securities in countries excluding the United States. It yields 4.99% annually and charges 59 bps in fees. The fund shed about 0.2% on Aug 23.

SPDR S&P International Dividend ETF (DWX); Relative Volume: 3.78

The underlying S&P International Dividend Opportunities Index measures the performance of the 100 highest dividend-yielding common stocks and ADRs listed on primary exchanges of countries included on the S&P Global BMI ex U.S. The fund charges 45 bps in fees and yields 4.19% annually. It retreated only 0.8% on Aug 23.