The Australian stock market has outhustled the U.S.for quite some time. 40% gains for the “Down Under” crowd versus 20% gains for the U.S.over the last couple of years is nothing to dismiss.
Roger Nusbaum recently extoled the virtue of the iShares MSCI Australia Index (EWA) due to greater diversification away from holding European shares. Yet there are several other reasons to like EWA as well. For starters, it has dropped less than European shares, Asia and/or other European shares during quasi-corrections of late. It also is a huge supplier to China’s thirst for materials. Finally, it has a juicy dividend of 4.7% for the participation.
When the downside risk of participation more closely approximates the United States, yet the dividend for EWA approximates high-yield savings, this is a risk-reward relationship worth looking at. See the chart!
Disclosure statement: Some of Pacific Park’s investment clients may hold positions in any of the investments mentioned above.