When you invest in global stocks, you have to be aware of two important factors – one is that they are capable of giving great returns and the second is those returns will be accompanied by risks in the respective global economies. With highly volatile economies found all over the globe, you must exercise discretion while investing in international stocks. If you want global exposure to your investments, but still want to protect yourself from the risks associated, you can try the following international exchange traded funds that hold some of the best global stocks in their portfolio. With these, you can not only be assured of stability of your investment, but also expect them to yield reasonable returns.
Great stocks, good dividends and low risk
When you get an ETF which pays an impressive 6% dividends, holds over 100 great stocks of developed economies and is highly reasonable to hold at an expense ratio of 0.5%, would you not be tempted to invest in the same? We are talking about the iShares International Select Dividend ETF (IDV, Financial). One of the major highlights of this fund is that all the 100 stocks that it holds are from highly developed economies like Australia, United Kingdom, Scandinavia, Western Europe, Singapore, Hong Kong, Canada, New Zealand and the like. These diversified geographies give investors a stability that is beyond their expectation. At present, the P/E ratio of this fund is just about 13. Currently, the prices are trading at a discount due to global fluctuations. However, given the high growth potential of this fund, the low prices present a perfect opportunity for investors to get into this fund. Price movement of this fund is shown below:
Diversified stocks in the emerging markets
If you are willing to take some risks and love to invest in a diverse range of stocks, the Wisdom Tree Emerging Markets Equity Income Fund (DEM, Financial) is the right choice for you. Though the stocks held in this fund are highly volatile and are subject to many risks, these are worth investing, because the growth rate is extremely high. The most favourable factor of this fund is that it holds stocks from various industries like financial services (28%), energy (19%), telecom (16%), utilities (7%), information technology (6%) and industrials (4%). Around 62% of the stocks held in this fund belong to emerging markets like China, Russia, South Africa and Taiwan. At present, the dividend yield of the fund is 5.4% and the expense ratio of this fund is just about 0.63%. This means the fund is quite affordable to hold. However, investors should keep in mind that this fund comes with lots of risks and should invest in this fund only if they have the inclination and capacity to take these risks. Stock movement of this fund for the last few months is seen below:
Focus on Real Estate
Exchange traded funds that hold stocks of different sectors are indeed great; however there are some global funds that specialise in a particular sector providing a good yield to investors. One of them is the iShares International Developed Real Estate ETF (IFGL, Financial). As the name indicates, this fund holds real estate stocks belonging to different economies. Currently, this fund holds 188 real estate investment trusts and property sector stocks from a large range of geographies like Japan (23%), Hong Kong (16%), Australia (13%), Singapore, Canada (7% each) and Western Europe (34%). Real estate is one of those sectors that have a permanent demand in the global markets. Hence this fund is one of the must-have international ETFs for investors looking for a good international exposure for their investments. With a dividend yield of 3.4% and expense ratio of 0.48%, this ETF is aimed at providing maximum value for their investors. Price movement trend of this fund is shown blow:
Conclusion
The global ETFs mentioned above are aimed at providing the much-needed diversification to the portfolio of investors. Since these funds hold stocks of developed and emerging markets, you, as an investor, can be confident of the growth potential of these stocks in the future. More importantly, these funds also have high dividend yields, which mean you are paid out a reasonable rate of returns on your investment. Hence these stocks are considered to be the best funds if you want diversification and global exposure.
