10 Country ETFs (and the S&P 500) All Show Negative Returns

Chart of 10 Country ETFs Performance vs S&P 500
Chart of 10 Country ETFs Performance vs S&P 500 – Source: TheTechnicals.com and TradingView

Well, it seems that you’re still better off being invested in U.S. equities instead of other countries’ stock markets. But that’s really not saying much. All of the key country ETFs that we charted here are all showing negative returns year-to-date (as of the market close on Friday, 12/14/2018). Some, like Russia, are doing better than others. But the top performing one is still the good ol’ U.S. S&P 500, which is down only a bit more than 2% since January.

The Country ETF Breakdown

In case it’s hard to read the cluttered chart above, here’s a list with the dismal breakdown:

  • U.S. S&P 500 (SPY): -2.39% YTD
  • Russia (RSX): -4.62% YTD
  • Brazil (EWZ): -5.24% YTD
  • India (INDA): -10.56% YTD
  • China (FXI): -10.92% YTD
  • Japan (EWJ): -11.63% YTD
  • Australia (EWA): -13.51% YTD
  • Canada (EWC): –14.41% YTD
  • U.K. (EWU): -15.88% YTD
  • Mexico (EWW): -18.30% YTD
  • Germany (EWG): -22.53% YTD

The heavily-traded German DAX index is currently the epitome of a declining equity market. The DAX recently entered into bear market territory (defined as a fall of 20% or more from the most recent peak). And the closely-correlated iShares MSCI Germany ETF is the worst performing country ETF on our list at -22.53% year-to-date.

Mexico and the U.K. are not doing much better at -18.30% and -15.88%, respectively.

Much of the negative performance seen in the global indexes can be attributed to increased fears of trade wars/tensions and slowing global economic growth this year. Of course, there are many other factors involved.

Country-Rotation Approach

In practice, unfortunately, it’s very difficult to choose the best international market(s) to invest in at any given time. It requires a great deal of knowledge, skill, and impeccable timing. And even then, it’s difficult.

One potentially advantageous approach when investing in global markets is to develop a country/region-rotation strategy, similar to the common sector-rotation strategies. This method allocates investments to those countries or regions that are in favor and experiencing momentum at any given point in time.

Right now, rallying country ETFs are clearly few and far between. But during less turbulent periods, rotating funds to countries with stronger markets may indeed be a sensible approach.


IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors. 

Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.

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