ETF Talk: Global Fund Offers Broad Exposure

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

Investing has been challenging for just about everyone so far this year. Sudden stock market pullbacks, economic setbacks, banking system problems and political change all have contributed to the tough market milieu. Since such risks likely will continue throughout the rest of the year, a diversified international fund is one way to hedge your investment bets across a broad cross-section of large public companies around the world. One global fund that you may want to consider is the Vanguard FTSE All-World Ex-US ETF (VEU), which invests in more than 2,000 companies across numerous sectors.

VEU still leaves you vulnerable to market downturns but it also spreads your risk to avoid huge hits if a particular market tanks for any reason. The fund’s recent performance has captured my attention. It closed at $42.51 yesterday, Aug. 14, up 4.73% from its opening price on Jan. 3. The fund also yields 3.22% but traditionally has paid an annual dividend in December, so you need to be patient to collect it. VEU gained momentum through the first quarter and hit a yearly high of $45.05 on March 1. The fund’s price slid to $37.65 on June 1 but it has rebounded since then. VEU now is trading above its 200-day and 50-day moving averages.

Here is a bit of additional detail about the fund. The Vanguard FTSE All-World Ex-US ETF (VEU) benchmarks the performance of the FTSE All-World Ex-US Index to track both developed and emerging world equity markets. The fund’s $12.9 billion in net assets are well allocated across eleven sectors that include financial services (20.81%), industrials (12.01%), basic materials (10.59%) and consumer defensive (10.48%). With diversification among a variety of sectors, VEU attempts to minimize potential losses. As of July 31, the fund’s top five holdings were Royal Dutch Shell PLC, Nestle S.A., BHP Billiton Ltd., Samsung Electronics Co. Ltd. and Novartis AG.

Exclusive  Bet on Health with This Cap-Weighted Fund

VEU also is appealing due to its low expense ratio of only 0.18%. Still, the fund poses risks worth mentioning. Management’s placement of more than 20% of its assets in financial services stocks exposes investors to fluctuations in that volatile sector. Many banks still may have difficult days ahead as economic weakness prevents borrowers from repaying loans.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. As always, I am happy to answer your questions about ETFs, so do not hesitate to email me by clicking here. You may see your question answered in a future ETF Talk.

share on:
share on:

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader
LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader
LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener
LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program
LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader
LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor
LEARN MORE HERE