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Best Performing Single-Country ETFs of January

Sweta Killa

Even though 2018 proved to be the worst year for the global stock market since 2008, it staged a strong rebound thanks to signs of progress in U.S.-China trade talks, stimulus in China’s economy, and Fed’s dovish outlook, which is particularly a strong contributor to emerging market growth. Additionally, rise in oil price added to the strength.

In particular, iShares MSCI ACWI ETF ACWI, which targets the global stock market, climbed 8% year to date and Vanguard FTSE All-World ex-US ETF VEU targeting the international equity market, excluding the United States, has gained 7.6% this year. However, still unresolved trade issues, Brexit uncertainty, geopolitical tension and global growth slowdown concerns continued to weigh on the stocks.

While there have been winners in many corners of the world, we highlight five top-performing country ETFs that have led the way higher so far this year with double-digit gains. Any of these could be excellent plays for investors seeking to ride out the current market trend:

First Trust Brazil AlphaDEX Fund FBZ

Brazil ETFs have been on a tear on hopes of economic reforms after President Jair Bolsonaro took office on Jan 1. This is because President has vowed to slash government pension spending, sale state assets, and simplify a complex tax system that would turn around the Latin America's biggest economy, which has been struggling since exiting its worst-ever recession two years ago. While all the Brazil ETFs have been riding high, FBZ has gained nearly 20%. The fund follows the NASDAQ AlphaDEX Brazil Index, an enhanced index, which employs the AlphaDEX stock selection methodology to select stocks from the NASDAQ Brazil Index. It holds 50 stocks in its basket with each accounting for less than 3.6%. It has $145.5 million in AUM and trades in good volume of about 157,000 shares. It charges 80 bps in annual fees and has a Zacks ETF Rank #4 (Sell) with a High risk outlook (read: Brazil Economy Gaining Steam: ETFs in Focus).

Global X MSCI Argentina ETF ARGT

After being badly hit by another financial crisis in 2018, the Argentine stock market showed a strong rebound. Argentina's central bank which introduced the tighter monetary policy late last year in an effort to curtail the peso's slide and curb inflation has started to pay off. Additionally, latest data suggests that the deficits in the country are declining. As a result, ARGT has gained 19.2% so far this year. The fund tracks the MSCI All Argentina 25/50 Index, holding 27 stocks in its basket with heavy concentration on the top two firms. It has managed $95.7 million in its asset base and trades in average daily trading volume of nearly 77,000 shares. It charges 59 bps in fees and expenses and has a Zacks ETF Rank #4 with a Medium risk outlook.

Global X MSCI Colombia ETF GXG

As Columbia is a commodity export-driven economy and oil accounts for more than half of its exports, rise in oil price is a biggest boon to its economy and the stock market. This ETF is the most popular way to play the country’s stock market by tracking the MSCI All Colombia Select 25/50 Index. In total, the fund holds 26 securities in its basket with heavy concentration on the top two firms. It has managed assets worth $84.5 million, while charging investors 61 bps a year in fees. Volume is moderate as it exchanges about 74,000 shares in hand per day. GXG also has a Zacks ETF Rank #4 with a Medium risk outlook (read: Oil Heads for Biggest 2-Year Weekly Gain: 5 Top ETFs, Stocks).

Invesco Golden Dragon China ETF PGJ

After being beaten down by the U.S.-China trade war, Chinese stocks seem attractively valued and are on the way of recovery driven by government stimulus. Additionally, signs in the progress of the U.S.-China trade talks also supported China’s stocks. While most of the ETFs have gained this year, PGJ has gained 16.7%. The fund tracks the Nasdaq Golden Dragon China Index while charges 70 bps in fees and expenses. Holding 64 stocks in the basket, it is moderately concentrated across securities. The product has AUM of $189.2 million and trades in average daily volume of 24,000 shares. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: U.S., China to Reach a Trade Deal? ETF Areas to Gain).

iShares MSCI Turkey ETF TUR

Turkish stocks climbed after the central bank left its interest rates unchanged, easing concerns that it would loosen its monetary policy amid declining inflationary pressures and a stronger lira currency. The Turkey ETF is up 15.5% so far this year and follows the MSCI Turkey Investable Market Index. It holds 53 stocks in its basket with a modest concentration on the top firms. The product has amassed an asset base of $588 million and charges 59 bps in fees per year from investors. Volume is solid at 1.2 million shares a day on average (read: EM Equities ETFs Off to a Great Start in 2019: Here's Why).

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