Back to top

Image: Bigstock

4 Best Single-Country ETFs of 2016

Read MoreHide Full Article

Even amid heights of volatility and uncertainty, stocks across the globe have performed remarkably well this year. This is especially true given that iShares MSCI ACWI ETF (ACWI - Free Report) , targeting the global stock market, has gained 6.3%.

Most of the gains were credited to stabilizing oil and commodity prices, a rebound in currencies and global easing policies. In particular, U.S. has been on the forefront with all the good tidings flowing into the economy lately. A few economies in developed and developing markets have also shown strength.

While there have been winners in many corners of the world, we have highlighted six country ETFs that have been leading the way this year, easily crushing ACWI. Further, these could be strong momentum plays heading into the New Year.

VanEck Vectors Russia Small-Cap ETF – Up 96.8%

Russian ETFs have been roaring on rising Brent crude price given that the economy is highly energy-dependent. Trump victory is acting as another tailwind to the economy and stocks as the bitter relationship between Russia and the U.S. is expected to ease with the President-elect’s pro-Russia view. In particular, RSXJ targeting the small cap segment of the Russian equity market is the winner, surging 96.8%. It follows the MVIS Russia Small-Cap Index (read: Will Russia ETFs Prosper Under Trump Presidency?).

Holding 28 stocks in its basket, the product is largely concentrated on the top 10 holdings at 60.5%. Utilities and materials are the top sectors with 25% and 23.8% share, respectively, followed by industrials (16.8%) and real estate (10.7%). However, RSXJ is unpopular and less liquid having AUM of $87 million and average daily volume of 42,000 shares. It charges 77 bps in annual fees and has a Zacks ETF Rank of 3 or ‘Hold’ rating with a High risk outlook.

iShares MSCI All Peru Capped ETF (EPU - Free Report) – Up 59.3%

The Peruvian stock market has been the star performer in Latin America this year thanks to a boom in commodity prices. Being the top gold-producing country and largest exporter of copper, stocks have primarily benefited from safe haven demand for gold and the recent spike in copper prices. The trend is likely to continue in the months ahead given Trump’s proposal to spend big on America's roads and bridges that are driving copper prices higher. As a result, EPU has climbed 59.3% this year (read: Peru ETF Hits New 52-Week High).

The product tracks the MSCI All Peru Capped Index, holding 27 stocks in its basket. It is highly concentrated on the top three firms with a combined 43.2% share while other firms hold no more than 4.7% of assets. About 44% of the portfolio is dominated by materials, closely followed by financials at 30.7%. The product has amassed $207.8 million in AUM while trades in average daily volume of more than 158,000 shares. It charges 62 bps in annual fees and has a Zacks ETF Rank of 3 with a Medium risk outlook.

iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) – Up 53.4%

Brazilian stocks have seen a torrid run buoyed by hopes of new reforms that can shore up the country’s recession-stricken economy after the subsequent impeachment of president Dilma Rousseff. Additionally, Rio Olympics 2016, commodity strength, easing inflationary pressure, a rebound in industrial production, and restoring business confidence added to the strength.

That being said, EWZS having AUM of $35.4 million has gained 53.4% this year. It provides targeted exposure to the Brazilian small-cap stocks by tracking MSCI Brazil Small Cap Index. The fund holds 58 stocks in its basket with none holding more than 5.16% of assets. From a sector look, consumer discretionary takes the top spot at 37.4%, followed by double-digit exposure each in utilities, materials and industrials. The fund charges investors 62 bps in fees per year and trades in a lower volume of 57,000 shares a day on average. It has a Zacks ETF Rank of 5 or ‘Strong Sell’ with a High risk outlook (read: Brazil ETFs in Focus as Central Bank Cuts Rates Again).

IQ Canada Small Cap ETF (CNDA - Free Report) – Up 37.5%

Canadian stocks have been on a tear with the S&P/TSX composite index on track to see its best year since 2009. The rally was mostly attributed to the rebound in oil prices and a rise in interest rates. Further, improving economic growth and relatively low inflation pushed the stocks higher. While all the Canadian ETFs have shown strong performance, CNDA stole the show, climbing 37.5%.

This fund also targets the small cap segment and follows the IQ Canada Small Cap Index. Holding 104 stocks in its basket, it does a decent job of spreading out assets, as none of the securities holds more than 3.04% share. However, it is a bit concentrated from a sector look as energy and materials take the top two positions at 28% each, while industrials round off to the next spot with a double-digit exposure. CNDA has accumulated $10.7 million in its asset base while trades in light average daily volume of 3,000 shares. Expense ratio came in at 0.69%. The product has a Zacks ETF Rank of 3 with a Medium risk outlook.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>

Published in