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The Best Performing Single Country ETFs

Cinthia Murphy

With all the focus on the U.S. economy and the Federal Reserve; on Japan’s ongoing efforts to spur growth; and on the eurozone’s post-Brexit-vote days, there are some single-country ETFs delivering stellar performances that are going by largely unnoticed.

South American Leaders

Consider the best-performing country ETF this year: the iShares MSCI All Peru Capped ETF (EPU). EPU is up 63.4% year-to-date—roughly 10 times the gains of the SPDR S&P 500 (SPY) in the same period. 

Peru has about 31 million people, and a GDP of about $190 billion—the seventh-largest economy in Latin America. According to a Focus Economics report, the country has faced important structural changes in the past several years, and confidence is up.

“Since GDP decelerated sharply in 2009, the economy has built on solid growth fundamentals,” the report said. “Domestic demand has been the main driver of growth as an overall improvement in confidence in the economy has boosted domestic consumption and investment.”

EPU tracks a market-cap-weighted index of Peruvian companies, and has $205 million in assets. The fund costs 0.63% in expense ratio, and trades with a hefty average spread of 0.21%, putting total cost of ownership of this fund at about $84 per $10,000 invested.

Brazil

The second-best-performing single-country ETF has gotten more press this year. The iShares MSCI Brazil Capped ETF (EWZ) is up 61.3% year-to-date. 

Brazil has made headlines this year as it hosted two major international events, the Olympics and the Paralympics. But what’s helping push the country’s stock market higher is the recent impeachment of Brazil’s President Dilma Rousseff.

Putting an end to more than 12 years of what’s been considered a business-unfriendly government that’s been tarnished by still-unfolding corruption scandals, the expectations for the impeachment and its confirmation in a recent Senate vote provided a boon to the battered stock market there.

Things are still tough for Brazil, which has seen economic contraction for at least three years now, with negative GDP growth of 3.8% in 2015. But there’s a growing sentiment that a market bottom may be upon us.

EWZ has $3.7 billion in assets under management, and it costs 0.62% in expense ratio, for an all-in cost—including trading spreads—of about $65 per $10,000 invested.

 

New Zealand

The third-best-performing single-country ETF this year is the iShares MSCI New Zealand Capped ETF (ENZL), with gains of 26.2% year-to-date. 

ENZL is a one-of-a-kind ETF. It’s the only choice U.S. investors have for total market access to New Zealand. The fund tracks a market-cap-weighted index of companies comprising the top 99% of the New Zealand equity market.

Like other commodity-linked economies, New Zealand felt the pinch of weakness in commodity market globally in recent years. But the country has managed to see some positive GDP growth—2.5% in 2015—thanks to central bank intervention and a focus on fostering domestic consumption and investment, according to Focus Economics.

ENZL’s biggest sector allocations are to utilities, consumer discretionary and health care. The fund remains relatively small, though, with only $177 million gathered since its launch in 2010. ENZL has an expense ratio of 0.48% and an average trading spread of 0.31%, putting its total cost of ownership at about $79 per $10,000 invested.

The Tight Race

Beyond these three standout performers, there’s a slew of single-country ETFs delivering roughly 25% in gains year-to-date. They include:

  • The Global X MSCI Colombia ETF (GXG), which tracks an index of large-, mid- and small-cap Colombian companies, and has about $86 million in AUM.
  • The Global X MSCI Argentina ETF (ARGT), which tracks a market-cap-weighted index of at least 25 companies headquartered or listed in Argentina, and that conduct most of their business in Argentina. The fund has $70 million in AUM.
  • The iShares MSCI Thailand Capped ETF (THD), the only purely Thai equity ETF offering largely comprehensive exposure. The fund has $425 million in AUM.
  • The VanEck Vectors Russia ETF (RSX), the first and largest Russia ETF with more than $1.7 billion in AUM. The fund invests in Russian companies, but it also can include Russian companies that are incorporated and/or listed abroad.

The chart below plots these ETFs’ year-to-date performances:

Charts courtesy of StockCharts.com

Contact Cinthia Murphy at cmurphy@etf.com

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