The world is becoming ever more entwined. The modern world has become a vast economic forum where flooding in Thailand affects US electronic consumers, European politics can strike fear into American investors, and Congolese mining rights can attract Chinese political favor. In the era of globalization where information flows on cables traveling at the speed of light, investors thinking the world was as geographically polarized as it once was may have to reconsider the present reality.
Yet just as the world has become more interconnected so has the trading stage for international exposure. Not long ago, your typical American investor had scarce means of reaching out to world developing around him, which often required accounts based on foreign stock exchanges in order to gain access to international equities. And yet today, he can invest in Chinese oil companies, seek safety in African gold mines, and take a position in Brazilian sugar production.
Through exchange-traded funds (ETFs), investors can take diversified approaches into unique sectors of growth found to be important in the shifting dynamics of the new world. Some of these funds may have otherwise been incomplete were they to neglect foreign companies held within. The following ETFs incorporate a few unique global markets that are now available to investors looking for a broader perspective of the world around them. They were chosen on the basis of their distinct focus when contrasted against the numerous international funds now available. They are listed here in order to illuminate their availability to those looking to expand their global reach, but are not necessarily recommendations on the basis of proven performance.
The Guggenheim Shipping ETF (SEA) invests in companies that are involved in the global shipping industry that primarily transport goods and materials. Passenger shipping companies are for the most part excluded from the ETF's holdings. The fund sports a trailing dividend yield of 5.7%, and does not have any holdings that make up more than 10% of the funds investments.
The Guggenheim China Small Cap ETF (HAO) tracks publicly-traded mainland China small cap companies that have a maximum market capitalization of $1.5 Billion. As China's economic growth continues, small companies with access to public capital theoretically offer one of the best opportunities for capital appreciation. The fund hosts a trailing distribution yield slight north of 3%, and does not have a position in any one company greater than 2% of the fund's portfolio.
The PowerShares Global Agriculture ETF (PAGG) taps into the overall performance of the largest and most liquid companies involved in agriculture and farming-related activities. With population and food prices increasing, farming companies around the world will be sure to capitalize on extended trend. The changing of diets (becoming more meat centric) and need for greater harvest yields in light of developing societies will also place heavier emphasis on agriculture in the future.
The PowerShares MENA Frontier Countries ETF (PMNA) is a fund that seeks to provide exposure to the Middle East/ North Africa region of the world. With a developing region that has recently undergone widespread revolution, the fund may offer a unique capacity to future development that is likely to ensue. Until events tend to stabilize, however, investors may want to time their own involvement in the region.
The EG Shares Emerging Markets Consumer ETF (ECON) is a fund that measure the performance of 30 emerging market companies that lead in the development, manufacturing, and sale of consumer goods and services. As emerging market consumers tend to develop loyalties around local brands, investing in companies establishing that connection can provide a prosperous outlook. As development spreads to nations around the world, growth in the domestic consumption markets will likely become synonymous with that development.
The Powershares Global Water ETF (PIO) invests in global companies that focus on the provision of potable water and the treatment of water resources. As water fit for consumption becomes ever more scarce, future development for the allocation of it will become ever more necessary. The fund is sure to offer a relative degree of stability and offers a distribution yield of about 1.75%.
The EG Shares Brazil Infrastructure ETF (BRXX) is an ETF comprised of the 30 leading companies that represent the infrastructure development in Brazil. This primarily involved the development of communications, electricity production, and basic utility needs for the population. As Brazil develops as the economic powerhouse of South America, investing in its growth capacity sets a long-term trend in place. The fund sports a trailing dividend yield of 4.67%.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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