Single Country Investing – Equity or Currency??? Surprising conclusion

By: ispeculatornew
Date posted: 02.10.2010 (5:00 am) | Write a Comment  (9 Comments)

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Increasingly, ETF’s are being offered to get exposure on single countries. You can of course buy exposure into countries like the US, Canada or France but also BRIC countries (Brazil, Russia, India & China). Often, investors such as me want to invest in a country because of its economic performance, its growth. The problem of course is that you do not necessarily make money when the GDP does well. So what are the best ways to profit from such a situation?

Equity or Currency???

There is of course no easy answer to such a question as economists even to this day do not agree and of course there are many different ways to look at the problem. In my case, I was wondering if you would be better off investing in the currency of a country (through a currency ETF) or in its stock market (through an equity ETF). The method is far from perfect but I thought it would make an interesting comparison and could lead to a good analysis.

So what I did was look for countries that have both equity and an FX ETF. In the case of Europe, I had to group them together since the Euro is used for most countries. I also needed at least 1 year of historical data for both set of ETF’s and in general I stayed away from leveraged ETF’s. I did try to look at leveraged ETF’s for Japan but you will see how that went.

Obviously, every country is different and a country like Japan would benefit much more from a weak yen economically then most countries given the importance of exports to its country. But the goal here was simply to look at some data and then discuss. So I would appreciate getting your input on the results obtained.

Also, for a few countries, there were several ETF’s that fit the criteria. I usually selected one or two based on popularity and objectives and then took the average when comparing

Without further delay, here are the results by Country/Region:

Results for the past year

Japan


TickerNameSharesFeb 18 2014 PriceFeb 18 2014 Values
OMCOmnicom Group Inc30$76.16$2,284.80
MSFTMicrosoft Corp73$37.42$2,731.66
JCIJohnson Controls Inc40$49.27$1,970.80
PEPPepsiCo Inc/NC28$78.18$2,189.04
ETNEaton Corp31$72.47$2,246.57
DOVDover Corp24$87.10$2,090.40
ITWIllinois Tool Works Inc28$79.92$2,237.76
XLNXXilinx Inc38$50.32$1,911.97
SJMJM Smucker Co/The20$95.31$1,906.20
BLKBlackRock Inc11$305.96$3,365.56
TROWT Rowe Price Group Inc29$80.66$2,339.14
OXYOccidental Petroleum Corp22$96.28$2,118.16
COPConocoPhillips26$65.37$1,699.62
XOMExxon Mobil Corp20$94.07$1,881.40
ADIAnalog Devices Inc44$51.23$2,254.12
HASHasbro Inc31$52.96$1,641.76
MATMattel Inc44$35.47$1,560.68
INTCIntel Corp54$24.76$1,337.04
AFLAflac30$63.03$1,890.90
BAXBaxter International24$69.29$1,662.96
IVZInvesco Ltd68$34.14$2,321.52
VWOVanguard FTSE Emerging Markets43$38.77$1,667.11
BNDVanguard Total Bond Market24$81.17$1,948.08
Cash$801.41
USDP$48,058.66
SPX14.72205005$3,310.89$48,743.06

Not much of a difference here with both currency and equity ETF’s being close to flat in the past year. (1.36% equity over performance)

United Kingdom

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
PCLNpriceline.com Inc1315.6535.9520.8113.1829.134.68133.021.24133.430.757
NILEBlue Nile Inc34.941.0627.03-25.8912.493.733.171.0735.8911.5513.14

Same conclusion as Japan with equities very slightly overperfoming currencies. (.73% equity over performance)

Australia


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
EXPEExpedia Inc78.5337.5717.6912.7318.383.6416.541.1535.3713.3711.1816.23
TZOOTravelzoo Inc23.6221.4717.8310.794.673.672.090.6410.3614.214.2N/A

Australia was one of the performing currencies in the past year and the equity markets did not match the performance (14.76% FX over performance)

Canada


TickerNamePriceDividend YieldPayout RatioEx-Dvd Date
WINWindstream Holdings Inc7.9512.59250.773/27/2014
FTRFrontier Communications Corp4.98.16362.423/5/2014
DODiamond Offshore Drilling Inc46.927.4688.694/30/2014
CTLCenturyLink Inc31.116.94231.483/6/2014
TAT&T Inc31.865.7753.134/8/2014
ESVEnsco PLC52.165.7536.93/6/2014
HCPHCP Inc38.695.63106.925/8/2014
HCNHealth Care REIT Inc58.865.43110.775/8/2014
RIGTransocean Ltd41.675.3863.795/28/2014
POMPepco Holdings Inc20.25.3587.023/6/2014
TETECO Energy Inc16.65.395.655/12/2014
MOAltria Group Inc36.455.2781.433/12/2014
ETREntergy Corp63.285.2583.115/12/2014
KMIKinder Morgan Inc/DE31.645.18138.484/25/2014
RAIReynolds American Inc53.295.0378.663/6/2014
SOSouthern Co/The42.054.83106.715/1/2014
NENoble Corp plc31.044.8324.315/1/2014
TEGIntegrys Energy Group Inc56.494.8261.885/28/2014
FEFirstEnergy Corp30.524.72119.435/5/2014
PMPhilip Morris International Inc80.454.6767.713/25/2014
PPLPPL Corp32.014.6579.363/6/2014
VTRVentas Inc62.794.62164.063/5/2014
PBCTPeople's United Financial Inc14.124.686.944/29/2014
LOLorillard Inc53.614.5969.925/28/2014
DRIDarden Restaurants Inc48.334.5564.094/8/2014
EDConsolidated Edison Inc55.464.5467.895/12/2014
VZVerizon Communications Inc47.314.4851.734/8/2014
DUKDuke Energy Corp70.054.4582.385/15/2014
EQREquity Residential58.524.44#VALUE!3/20/2014
SCGSCANA Corp49.214.2760.33/6/2014
GASAGL Resources Inc46.894.1870.935/14/2014
PCGPG&E Corp43.634.17100.613/27/2014
COPConocoPhillips66.314.1641.665/15/2014
EXCExelon Corp30.034.1373.555/13/2014
MACMacerich Co/The60.124.13253.125/9/2014
PNWPinnacle West Capital Corp55.074.1275.484/29/2014
MATMattel Inc36.94.1254.715/19/2014
PEGPublic Service Enterprise Group Inc36.144.158.613/5/2014
PCLPlum Creek Timber Co Inc43.014.09135.515/14/2014
CNPCenterPoint Energy Inc23.484.05114.155/14/2014
KIMKimco Realty Corp22.254.0445.924/1/2014
AEPAmerican Electric Power Co Inc49.724.0264.465/9/2014
XELXcel Energy Inc30.01458.433/18/2014
AEEAmeren Corp40.363.9675.813/10/2014
IRMIron Mountain Inc27.453.93213.913/19/2014
WMBWilliams Cos Inc/The41.643.872243/12/2014
CMSCMS Energy Corp28.263.8259.695/7/2014
KRFTKraft Foods Group Inc55.13.8145.053/27/2014
FCXFreeport-McMoRan Copper & Gold Inc32.833.8184.824/11/2014
CINFCincinnati Financial Corp46.463.7952.953/17/2014
LEGLeggett & Platt Inc31.713.7889.993/12/2014
DTEDTE Energy Co70.93.768.533/13/2014
INTCIntel Corp24.53.6746.565/7/2014
WMWaste Management Inc41.283.63696.943/6/2014
SESpectra Energy Corp373.62795/7/2014
AVBAvalonBay Communities Inc129.013.6932.943/27/2014
WECWisconsin Energy Corp43.463.5956.965/14/2014
GRMNGarmin Ltd53.63.5860.313/13/2014
SPLSStaples Inc13.463.57#VALUE!3/26/2014
NUNortheast Utilities43.953.5758.975/30/2014
CAGConAgra Foods Inc28.383.5252.554/30/2014
CSCOCisco Systems Inc21.573.5233.164/1/2014
GEGeneral Electric Co25.123.553.116/26/2014
DDominion Resources Inc/VA68.593.572.885/28/2014
CVXChevron Corp114.843.4834.895/14/2014
MCDMcDonald's Corp94.323.4355.55/30/2014
AIVApartment Investment & Management Co30.43.4231414.275/14/2014
PAYXPaychex Inc41.183.483.785/8/2014
CVCCablevision Systems Corp17.643.4483.893/12/2014
ABBVAbbVie Inc50.093.3576.994/11/2014
LLYEli Lilly & Co59.033.3244.895/13/2014
PSAPublic Storage168.693.32104.673/12/2014
GMGeneral Motors Co36.213.3103/14/2014
FFord Motor Co15.23.29224/28/2014
STXSeagate Technology PLC52.293.2928.185/12/2014
CLXClorox Co/The86.663.2860.064/21/2014
PFEPfizer Inc31.983.2557.685/7/2014
LMTLockheed Martin Corp163.553.25525/29/2014
PLDPrologis Inc40.933.23288.823/10/2014
SYYSysco Corp363.2265.994/2/2014
NEENextEra Energy Inc90.283.2165.546/4/2014
KOCoca-Cola Co/The38.123.257.853/12/2014
DPSDr Pepper Snapple Group Inc51.683.1749.423/13/2014
MCHPMicrochip Technology Inc44.953.16214.955/20/2014
HASHasbro Inc54.653.1572.784/29/2014
MRKMerck & Co Inc56.423.12116.533/13/2014
PGProcter & Gamble Co/The77.483.1156.754/23/2014
SPGSimon Property Group Inc161.943.09112.095/12/2014
KMBKimberly-Clark Corp109.043.0858.083/5/2014
CLFCliffs Natural Resources Inc19.553.0725.095/13/2014
DOWDow Chemical Co/The48.443.0634.443/27/2014
RSGRepublic Services Inc34.043.0660.873/28/2014
GISGeneral Mills Inc49.863.0546.794/10/2014
VNOVornado Realty Trust96.483.03265.315/7/2014
KKellogg Co60.673.0336.163/4/2014
CACA Inc33.143.0248.486/9/2014
WYWeyerhaeuser Co29.283.0184.955/7/2014
WUWestern Union Co/The16.593.0134.723/13/2014
OXYOccidental Petroleum Corp96.05334.763/6/2014
IGTInternational Game Technology14.712.9932.743/18/2014

Solid returns in both but FX wins it (3.78% FX over performance)

Switzerland


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg GrowthSales 5Y Avg GrowthEPS 5Y Avg Growth
MSFTMicrosoft Corp37.913.4213.062.745.63.5810.250.99.38.19138.1913
AOLAOL Inc44.0424.5816.82-4.445.853.928.620.5829.9N/AN/AN/AN/A

Good returns in both but FX wins it barely (1.17% FX over performance)

Mexico

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsRevenue/Share
PPandora Media Inc35.27N/A73.2530.53132.523.782.621.65N/A3.54
LNKDLinkedIn Corp196.32860.1773.49-8.7657.214.1921.850.9805-02-201413.45

Equity markets have had an amazing run in Mexico and even the strong peso did not account for close to that (8.71% equity over performance)

Sweden


TickerNameSharesMar 17 2014 PriceMar 17 2014 Values
OMCOmnicom Group Inc31$72.80$2,256.80
MSFTMicrosoft Corp73$38.05$2,777.65
JCIJohnson Controls Inc41$46.58$1,909.78
PEPPepsiCo Inc/NC29$82.05$2,379.45
ETNEaton Corp32$72.40$2,316.80
DOVDover Corp25$81.43$2,035.75
ITWIllinois Tool Works Inc28$81.78$2,289.84
XLNXXilinx Inc38$52.91$2,010.58
SJMJM Smucker Co/The20$96.12$1,922.40
BLKBlackRock Inc12$298.71$3,584.52
TROWT Rowe Price Group Inc30$81.58$2,447.40
OXYOccidental Petroleum Corp23$96.85$2,227.55
COPConocoPhillips26$67.29$1,749.54
XOMExxon Mobil Corp20$94.32$1,886.40
ADIAnalog Devices Inc45$50.68$2,280.60
HASHasbro Inc31$54.96$1,703.76
MATMattel Inc44$37.66$1,657.04
INTCIntel Corp54$24.70$1,333.80
AFLAflac30$63.82$1,914.60
BAXBaxter International25$66.50$1,662.50
IVZInvesco Ltd68$34.90$2,373.20
VWOVanguard FTSE Emerging Markets43$38.42$1,652.06
BNDVanguard Total Bond Market25$81.18$2,029.50
Cash$790.67
USDP$49,192.19
SPX15.02058773$3,349.66$50,313.88

The Krona ruled… (3.71% FX over performance)

Europe


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaEarningsRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIIAC/InterActiveCorp72.7622.5315.847.157.933.9520.521.034/30/201436.2116.67N/A
EBAYeBay Inc56.9626.8116.924.1114.034.418.2714/29/201412.3917.7582.52

This one is a bit difficult to evaluate because Europe is so broad and not all countries in Europe are part of the Euro currency zone. But it was worth looking at (6.53% equity over performance)

Brazil


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
IACIIAC/InterActiveCorp72.7622.5315.847.157.933.9520.521.0336.2116.67N/A
EBAYeBay Inc56.9626.8116.924.1114.034.418.27112.3917.7582.52

When a stock market returns 30% or so…you could not possibly expect the FX to match that return (23.24% Equity over performance)

Russia


TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg Growth     
LNKDLinkedIn Corp190.59832.6171.11-11.6857.214.1621.851.0113.45N/A
CRMSalesforce.com Inc55.75N/A80.282.4133.474.365.021.056.8131.78

Another BRIC stock and another equity win (13.59% equity over performance)

India


TickerNamePriceDividend YieldPayout RatioEx-DVD Date
WINWindstream Holdings Inc8.2412.14250.776/26/2014
DODiamond Offshore Drilling Inc48.767.1888.694/30/2014
FTRFrontier Communications Corp5.77.02362.426/11/2014
CTLCenturyLink Inc32.846.58N/A5/30/2014
ESVEnsco PLC52.785.6836.96/12/2014
HCPHCP Inc38.795.62106.925/8/2014
RIGTransocean Ltd41.345.4263.795/28/2014
HCNHealth Care REIT Inc59.65.343110.775/8/2014
POMPepco Holdings Inc20.485.27245.456/10/2014
TAT&T Inc35.075.2553.134/8/2014
TETECO Energy Inc17.155.1396.665/12/2014
MOAltria Group Inc37.435.1381.436/13/2014
KMIKinder Morgan Inc/DE32.495.05138.484/25/2014
RAIReynolds American Inc53.425.0278.666/11/2014
ETREntergy Corp66.854.9783.115/12/2014
VTRVentas Inc60.574.79164.066/6/2014
EDConsolidated Edison Inc53.654.767.895/12/2014
SOSouthern Co/The43.944.62107.365/1/2014
PMPhilip Morris International Inc81.874.5967.716/24/2014
TEGIntegrys Energy Group Inc59.654.5661.885/28/2014
LOLorillard Inc54.084.5569.925/28/2014
PPLPPL Corp33.144.579.796/10/2014
VZVerizon Communications Inc47.574.4651.734/8/2014
DUKDuke Energy Corp71.224.3882.385/15/2014
PBCTPeople's United Financial Inc14.874.3787.674/29/2014
DRIDarden Restaurants Inc50.764.3364.094/8/2014
SPLSStaples Inc11.344.2344.266/25/2014
FEFirstEnergy Corp34.034.23245.235/5/2014
PCGPG&E Corp43.24.21100.616/30/2014
PCLPlum Creek Timber Co Inc42.044.19135.515/14/2014
PNWPinnacle West Capital Corp54.664.1560.314/29/2014
KIMKimco Realty Corp21.884.11174.484/1/2014
SCGSCANA Corp51.324.0960.36/11/2014
CNPCenterPoint Energy Inc23.694.01114.155/14/2014
GASAGL Resources Inc48.96470.935/14/2014
MACMacerich Co/The62.333.98208.325/9/2014
WMBWilliams Cos Inc/The40.583.97222.626/4/2014
AEPAmerican Electric Power Co Inc50.663.9564.465/9/2014
XELXcel Energy Inc30.363.9558.436/17/2014
COPConocoPhillips70.353.9241.665/15/2014
IRMIron Mountain Inc27.573.92213.916/18/2014
PEGPublic Service Enterprise Group Inc38.143.8858.576/6/2014
AEEAmeren Corp41.23.8875.816/9/2014
MATMattel Inc40.113.7955.25/19/2014
FCXFreeport-McMoRan Copper & Gold Inc33.073.7884.824/11/2014
KRFTKraft Foods Group Inc56.13.7445.054/9/2014
CMSCMS Energy Corp29.283.6959.695/7/2014
EXCExelon Corp33.563.6973.555/13/2014
LEGLeggett & Platt Inc32.643.6887.716/18/2014
SESpectra Energy Corp36.943.63795/7/2014
CINFCincinnati Financial Corp48.663.6252.226/16/2014
WMWaste Management Inc42.073.56696.946/10/2014
CVCCablevision Systems Corp16.873.56122.865/13/2014
DTEDTE Energy Co74.293.5368.536/19/2014
AVBAvalonBay Communities Inc131.323.53932.946/30/2014
INTCIntel Corp25.813.4946.565/5/2014
GRMNGarmin Ltd55.263.4760.316/13/2014
NUNortheast Utilities45.53.4559.455/30/2014
EQREquity Residential57.993.45#VALUE!6/19/2014
AIVApartment Investment & Management Co30.223.44335.825/14/2014
GEGeneral Electric Co25.893.453.116/26/2014
CSCOCisco Systems Inc22.413.3933.164/1/2014
DDominion Resources Inc/VA70.993.3872.885/28/2014
CVXChevron Corp118.913.3634.895/14/2014
WECWisconsin Energy Corp46.553.3556.965/14/2014
LLYEli Lilly & Co58.863.3344.895/13/2014
PSAPublic Storage168.493.32104.676/9/2014
MCDMcDonald's Corp98.033.355.55/30/2014
ABBVAbbVie Inc51.43.2776.994/11/2014
LMTLockheed Martin Corp163.243.26525/29/2014
PFEPfizer Inc32.123.2457.685/7/2014
CACA Inc30.973.2348.486/9/2014
PLDPrologis Inc40.833.23288.826/12/2014
CLXClorox Co/The88.013.2360.064/21/2014
CAGConAgra Foods Inc31.033.2252.554/30/2014
FFord Motor Co15.63.21224/28/2014
GMEGameStop Corp41.13.2136.45/22/2014
SYYSysco Corp36.133.2165.994/2/2014
KOCoca-Cola Co/The38.663.1657.856/11/2014
GISGeneral Mills Inc51.823.1646.794/8/2014
PEPPepsiCo Inc83.53.1451.25/28/2014
IGTInternational Game Technology14.063.1332.746/17/2014
MRKMerck & Co Inc56.773.1116.536/12/2014
HASHasbro Inc55.623.0972.884/29/2014
WUWestern Union Co/The16.363.0634.726/12/2014
SPGSimon Property Group Inc1643.05112.095/12/2014
IPInternational Paper Co45.883.0541.055/23/2014
KMBKimberly-Clark Corp110.253.0558.086/4/2014
DOWDow Chemical Co/The48.593.0534.446/26/2014
RSGRepublic Services Inc34.163.0460.876/27/2014
NEENextEra Energy Inc95.623.0365.236/4/2014
OXYOccidental Petroleum Corp95.293.0234.96/6/2014
DPSDr Pepper Snapple Group Inc54.463.0149.426/19/2014
WYWeyerhaeuser Co29.35384.955/7/2014
PGProcter & Gamble Co/The80.62.9956.754/23/2014
MCHPMicrochip Technology Inc47.762.97214.955/20/2014
VNOVornado Realty Trust98.562.96#VALUE!5/7/2014
CLFCliffs Natural Resources Inc20.462.9325.095/13/2014
KKellogg Co62.712.9336.165/30/2014
NUENucor Corp50.542.9396.746/30/2014

India is actually the country (among those looked at here) where the equity over performance is the most important with over 25% more in the equity return. (25.69% equity over performance)

China


TickerNameSharesApr 14 2014 PriceApr 14 2014 Values
OMCOmnicom Group Inc31$68.87$2,134.97
MSFTMicrosoft Corp73$39.18$2,860.14
JCIJohnson Controls Inc41$46.11$1,890.51
PEPPepsiCo Inc/NC29$83.55$2,422.95
ETNEaton Corp32$71.03$2,272.96
DOVDover Corp25$81.56$2,039
KNKnowles Corp12.5$30.02$375.25
ITWIllinois Tool Works Inc29$81.64$2,367.56
XLNXXilinx Inc38$51.69$1,964.22
SJMJM Smucker Co/The20$95.39$1,907.80
BLKBlackRock Inc12$298.47$3,581.64
TROWT Rowe Price Group Inc30$77.99$2,339.70
OXYOccidental Petroleum Corp23$94.32$2,169.36
COPConocoPhillips26$71.51$1,859.26
XOMExxon Mobil Corp20$97.86$1,957.20
ADIAnalog Devices Inc45$52.46$2,360.70
HASHasbro Inc31$53.65$1,663.15
MATMattel Inc44$38.14$1,678.16
INTCIntel Corp54$26.56$1,434.24
AFLAflac30$61.19$1,835.70
BAXBaxter International25$72.76$1,819
IVZInvesco Ltd68$34.41$2,339.88
VWOVanguard FTSE Emerging Markets61$41.26$2,516.86
BNDVanguard Total Bond Market33$81.54$2,690.82
Cash$337.42
USDP$50,818.45
SPX15.32335164$3,302.90$50,611.55

Like other BRIC stocks, equity wins (12.31% equity over performance)

Leveraged Japan


TickerNamePriceDividend YieldPayout RatioEx-Dvd
WINWindstream Holdings Inc9.110.99250.776/26/2014
DODiamond Offshore Drilling Inc51.66.7888.697/31/2014
FTRFrontier Communications Corp66.67362.426/11/2014
CTLCenturyLink Inc34.846.2#VALUE!5/30/2014
ESVEnsco PLC50.755.9136.96/12/2014
RIGTransocean Ltd42.855.2363.795/28/2014
HCPHCP Inc42.25.17106.925/8/2014
TAT&T Inc35.765.1553.137/9/2014
KMIKinder Morgan Inc/DE32.745.13138.487/31/2014
HCNHealth Care REIT Inc63.5453110.775/8/2014
TETECO Energy Inc17.914.9196.665/9/2014
NENoble Corp plc30.944.8525.28/7/2014
MOAltria Group Inc39.894.8181.436/13/2014
RAIReynolds American Inc55.944.7978.666/11/2014
SOSouthern Co/The44.494.72107.367/31/2014
TEGIntegrys Energy Group Inc58.564.6461.885/28/2014
PBCTPeople's United Financial Inc14.324.6187.677/30/2014
ETREntergy Corp73.134.5483.115/13/2014
DRIDarden Restaurants Inc49.114.4864.097/7/2014
VZVerizon Communications Inc47.394.4751.737/9/2014
EDConsolidated Edison Inc57.034.4267.895/12/2014
PMPhilip Morris International Inc85.344.4167.716/24/2014
PPLPPL Corp34.364.3479.796/10/2014
VTRVentas Inc66.984.33164.066/6/2014
FEFirstEnergy Corp33.424.31245.238/5/2014
DUKDuke Energy Corp73.524.2482.385/14/2014
LOLorillard Inc58.384.2169.925/28/2014
PNWPinnacle West Capital Corp54.664.1560.317/31/2014
PCGPG&E Corp44.864.06100.616/30/2014
SCGSCANA Corp52.254.0260.36/6/2014
PCLPlum Creek Timber Co Inc44.063.99135.515/14/2014
POMPepco Holdings Inc27.143.98245.456/6/2014
AEEAmeren Corp40.623.9475.816/9/2014
KIMKimco Realty Corp22.933.92174.486/30/2014
CNPCenterPoint Energy Inc24.473.88114.155/14/2014
IRMIron Mountain Inc27.83.88213.916/18/2014
MATMattel Inc39.343.8655.25/21/2014
XELXcel Energy Inc31.243.8458.436/17/2014
SPLSStaples Inc12.553.8244.266/25/2014
MACMacerich Co/The65.013.81208.325/7/2014
AEPAmerican Electric Power Co Inc53.363.7564.465/7/2014
PEGPublic Service Enterprise Group Inc39.623.7458.576/4/2014
KRFTKraft Foods Group Inc56.263.7345.056/26/2014
WMBWilliams Cos Inc/The43.523.7222.626/4/2014
FCXFreeport-McMoRan Copper & Gold Inc34.073.6784.827/10/2014
LEGLeggett & Platt Inc32.673.6787.716/18/2014
GASAGL Resources Inc53.53.6670.935/14/2014
CMSCMS Energy Corp29.783.6359.698/6/2014
CINFCincinnati Financial Corp49.023.5952.226/16/2014
COPConocoPhillips76.893.5941.665/15/2014
CVCCablevision Systems Corp173.53122.865/13/2014
OKEONEOK Inc63.733.51114.418/6/2014
IGTInternational Game Technology12.563.532.746/17/2014
PFEPfizer Inc29.963.4757.685/7/2014
GMEGameStop Corp38.153.4637.215/22/2014
GMGeneral Motors Co34.753.4506/6/2014
INTCIntel Corp26.173.4446.568/7/2014
EXCExelon Corp36.243.4273.555/13/2014
CVXChevron Corp125.363.4134.895/15/2014
STXSeagate Technology PLC50.513.4128.185/12/2014
WMWaste Management Inc44.113.4696.946/10/2014
SESpectra Energy Corp39.63.38795/7/2014
NUNortheast Utilities46.623.3759.455/28/2014
PAYXPaychex Inc41.493.3783.785/8/2014
DDominion Resources Inc/VA71.163.3772.885/28/2014
CACA Inc29.663.3748.486/9/2014
DTEDTE Energy Co77.933.3668.536/12/2014
AVBAvalonBay Communities Inc138.243.36932.946/30/2014
GRMNGarmin Ltd57.483.3460.316/13/2014
LLYEli Lilly & Co58.883.3344.895/13/2014
CSCOCisco Systems Inc22.963.3133.167/1/2014
GEGeneral Electric Co26.583.3153.116/26/2014
AIVApartment Investment & Management Co31.473.3335.825/14/2014
CAGConAgra Foods Inc30.353.2952.557/30/2014
EQREquity Residential60.793.29#VALUE!6/19/2014
ABBVAbbVie Inc51.363.2776.997/9/2014
PSAPublic Storage171.933.26105.026/11/2014
WECWisconsin Energy Corp48.023.2556.965/12/2014
CLXClorox Co/The87.313.2560.067/21/2014
LMTLockheed Martin Corp165.123.22525/29/2014
PLDPrologis Inc41.193.2288.826/9/2014
MCDMcDonald's Corp101.143.255.55/30/2014
FFord Motor Co15.743.18227/28/2014
PGProcter & Gamble Co/The81.73.1556.757/16/2014
SYYSysco Corp37.193.1265.997/2/2014
COHCoach Inc43.393.1133.736/4/2014
HASHasbro Inc55.523.172.887/29/2014
GISGeneral Mills Inc53.013.0946.797/7/2014
WUWestern Union Co/The16.273.0734.726/12/2014
PEPPepsiCo Inc85.913.0551.25/28/2014
KMBKimberly-Clark Corp110.233.0558.086/4/2014
IPInternational Paper Co45.883.0541.055/23/2014
OXYOccidental Petroleum Corp94.73.0434.96/6/2014
MCHPMicrochip Technology Inc46.763.04214.955/20/2014
DOWDow Chemical Co/The49.36334.446/26/2014
MRKMerck & Co Inc58.633116.536/12/2014
KOCoca-Cola Co/The40.762.9957.856/12/2014
SPGSimon Property Group Inc174.052.99112.095/14/2014
LYBLyondellBasell Industries NV93.662.9929.38/14/2014
SYMCSymantec Corp20.12.9905/22/2014

The Conclusion

FX easily won this one because of a massive underperformance in the EWV ETF (30.51% FX over performance)…but given the long term characteristics of leveraged ETF’s, I don’t consider this result as significant in any way.

Conclusion: There could be much said about this and I will have to spend more time but on average, the equity ETF’s over performed in the past year over the FX currency of each individual country. Will the tendency remain? It will be interesting to see.

As well, I find it very interesting that BRIC ETF’s were so one-sided compared to the others

BRIC: Equity over performance by 12.29% on average
Other countries: FX over performance by 0.74% on average

Any thoughts on the results or the reasons why? I am certain that a full post could be written on almost any of these countries but I certainly thought the result was still a very interesting one.

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9 Comments

  1. Comment by Zavi — February 10, 2010 @ 10:15 am

    Great post! wow that’s an fascinating discovery!! I knew that BRIC countries are potential investment opportunities, but, I am very surprised with that result. No doubt it is a good piece of information!! I’m now thinking investing in BRIC ETFs. BKF or EEB or BIK? But which one, concerning Expense ratio vs Replication?

    Thank you.

  2. Comment by IS — February 11, 2010 @ 2:55 pm

    @Zavi – Difficult to say, Brazil is the popular one and likely will remain so for a few years so I think I’d go with that one.

  3. Comment by John — February 10, 2010 @ 11:01 am

    Just to understand your results, i have a few questions:

    Are equity ETFs converted in US$? Are FX ETFs based on US$? What’s the difference between JPN and Leveraged JPN results?

  4. Comment by IS — February 11, 2010 @ 2:57 pm

    @John – Good questions. Actually, all ETF’s presented here are US ETF’s so no conversion necessary on my part, they are all included in the 1 year return of these ETF’s. And as for the difference between the leveraged returns, honestly I did not spend too much time on that since results did not see to make much sense.

  5. Comment by Adam Wildavsky — February 10, 2010 @ 11:12 pm

    What time period did you use? In 2008 equity ETFs did much worse than your figures indicate. In 2009 they did much better. I don’t think one year is sufficient to draw a conclusion.

  6. Comment by IS — February 11, 2010 @ 2:58 pm

    @Adam – I did a one year period ending last Friday. And yes I agree that it’s difficult to draw conclusions from it, but I thought it would be interesting to look at results and might warrant more time. Any thoughts?

  7. Pingback by Finanical Ramblings — February 13, 2010 @ 9:40 am

    […] Speculator compares investing in one country’s currency or market index… the result is quite […]

  8. Comment by Adam@RabbitFunds — February 15, 2010 @ 9:36 pm

    I think this is a great first cut at analyzing not only the differences between equity and currency ETFs but also country specific opportunities. As already mentioned, the BRIC countried obviously have shown strong returns over the last year and definitely warrant further analysis as part of an overall international investment strategy.

  9. Comment by IS — February 25, 2010 @ 7:41 am

    @Adam – Any thoughts or ideas on the reasons that caused the differences for BRIC’s?

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