Another Way to Capture the World

By March 9, 2007Global ETFs

As mentioned in the previous post, EFA and DTH lack exposure to Asian markets, emerging markets as well as several industrialized nations like Canada.  This gives the all-world SPDR MSCI ex-US (CWI) a potential edge.

Yet, CWI has even less volume than EFA or DTHThat can engender extreme price swings as well as frustration for entering or exiting positions.  What’s more, some might find the volatility a bit unsettling.

There’s no easy fix.  However, if one wishes to capture much of the world (emerging markets included), and wishes to reduce volatility, here’s one suggestion.  The iShares MCSI EAFE Value Index (EFV) gives you the large-company value stocks of European nations, while the Wisdom Tree High Yield INdex (ex-Japan) DNH serves up a 6% dividend with its Asian feast.

CWI is too new to see how it might compare against a combination of EFV and DNH.  However, I’m inclined to favor the combo for the dividend potential.

Disclosure statement: Some of Pacific Park’s investment clients may hold positions in any of the investments mentioned above.

Leave a Reply