Scalper1 News
The international stock markets had a rough run in the first quarter of 2016, with the Vanguard FTSE All-World ex-US ETF (NYSEARCA: VEU ) losing 0.6%, thanks to deflationary worries in the developed market, oil price issues, the Chinese market upheaval and its ripple effects on the other markets (see all World ETFs here ). While these issues made the country ETF losers’ list long, the space was not bereft of winners either. Several countries’ stock markets performed impressively in this time frame on country-specific factors. Plus, a soggy greenback boosted the demand for emerging market investing, increasing foreign capital inflows into those countries. In fact, the lure of international investing may be seen in the second quarter too, as the Fed is likely to opt for a slower-than-expected interest rate rise. Overall, Latin America won the top three winners’ medals, while the losers were scattered across the world. Investors may wish to know the best- and worst-performing country ETFs of the first quarter. Below, we highlight the top- and worst-performing country ETFs for the January to March period. Leaders iShares MSCI All Peru Capped (NYSEARCA: EPU ) – Up 30.8% The Peruvian market was on a tear in the first quarter, courtesy of the sudden spurt in commodity prices. After a rough patch, metals like gold and silver finally got back their sheen this year on a lower greenback. Even copper returned positively, as evident from the 2.6% return by the iPath DJ-UBS Copper Total Return Sub-Index ETN (NYSEARCA: JJC ). Being a large producer of precious metals, Peru greatly benefited from this trend, offering the pure play EPU a solid 30.8% return. iShares MSCI Brazil Capped ETF (NYSEARCA: EWZ ) – Up 27.2% While the economic growth prospects of Brazil are weakening, heightened political chaos is pushing up its market. Brazilian stocks have generally reacted positively to any political drama related to president Dilma Rousseff. Speculation that Rousseff is incapable of dissuading the impeachment proceedings that have been called against her, and the prospect of a change in governance set the Brazil ETFs on fire. Global X MSCI Colombia ETF (NYSEARCA: GXG ) – Up 22% The Colombian economy is a major exporter of commodities, from the energy sector (oil, coal, natural gas) to the agricultural sector (coffee). It has also a strong exposure to the industrial metal production market. Thus, a rebound in the commodities market led to the surge in this ETF. Though from a year-to-date look oil prices are down, commodities bounced in the middle of the quarter. This might have given a boost to the Colombia ETF. Losers WisdomTree Japan Hedged Financials ETF (NYSEARCA: DXJF ) – Down 24.1% At its January-end meeting, the BoJ set its key interest rate at negative 0.1% to boost inflation and economic growth. The BoJ then hinted at further cuts in interest rates if the economy fails to improve desirably. However, the introduction of negative interest rates weighed on the financial sector, as these stocks perform favorably in a rising rate environment. Also, the currency-hedging technique failed in the quarter due to a falling U.S. dollar. This was truer for the Japan equities, as the yen added more strength by virtue of its safe-haven nature. The twin attacks dulled the demand for the hedged Japan financials ETF, which lost 24.1% in the quarter. Deutsche X-trackers MSCI Spain Hedged Equity ETF (NYSEARCA: DBSP ) – Down 21.6% The Spanish economy is bearing the brunt of deflationary threats despite the ECB’s massive policy easing. Consumer prices in Spain are likely to decline 0.8% year over year in March 2016, the same as in February, as per Trading Economics . This led the Spain ETF to lose 21.6% in the first quarter. SPDR MSCI China A Shares IMI ETF (NYSEARCA: XINA ) – Down 19.21% Since the first quarter was mainly about the nagging economic slowdown in China, most of the China ETFs had a tough time. Within the bloc, XINA lost the most in the quarter, shedding over 19%. Original Post Scalper1 News
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