ETFs
5 Best Country ETFs of Q2
Wall Street performed moderately in the second quarter of 2024, with the S&P 500 gaining 5.1%, the Dow Jones losing 0.4%, the Nasdaq gaining 8.6% and the Russell 2000 falling 2.3%. respectively (as of June 25, 2024). 2024). Major stock indexes reached all-time highs during the quarter.
April became the worst month of 2024 for Wall Street due to rising interest rate concerns, followed by a strong rally in May and June. Wall Street’s performance clearly demonstrates the broader market’s reliance on the “Magnificent Seven.” This bloc, which includes NVIDIA, Microsoft, Apple, Amazon, Meta, Alphabet and Tesla, represents about 30% of the S&P 500 and more than 40% of the Nasdaq-100.
The current craze for artificial intelligence (AI), recent signs of slowing inflation and resulting Fed rate cut bets, as well as strong corporate profit growth, have fueled the investor confidence in the stock market over the past two months.
What is happening in global markets?
International economies generated much lower returns than the U.S. market. Global ETF iShares MSCI ACWI ETF ACWI, which has a large stake in U.S. stocks, has gained about 3.5% so far in the second quarter.
Vanguard FTSE All World ex US ETF VEU is up 1.7% over the past three months. iShares MSCI Eurozone ETF EZU delivered a flat performance. iShares MSCI Japan ETF EWJ is down 4.1%, while iShares MSCI Emerging Markets ETF EEM grew by 4.8%.
Against this backdrop, we present below some winning domestic ETFs from the second quarter.
Focus on ETFs
iShares MSCI Türkiye ETF (TUR) – Up 17.5%
Turkish stocks have soared thanks to market-friendly measures put in place by the government. Turkey’s central bank expects inflation to end the year at 38%, down from 75.45% recorded in May 2024. As a result, Turkey’s central bank left its rate at stable guiding interest up to 50% in May. Meanwhile, President Erdogan won another term last year. Erdogan has launched pro-market policies and tried to restore his harsh relations with the West. Foreign investors reacted positively to this development.
iShares MSCI South Africa ETF (EZA) – Up 16.7%
South African stocks jumped on election hopes. Despite some upheaval in early June following the snap election results, the stock market gradually improved as political leaders agreed on a broad alliance to form the next government.
iShares China Large-Cap ETF (FXI) – Up 13.2%
Chinese stocks have been under pressure last year due to the government’s anti-growth policies and the real estate crisis. But it appears Chinese stocks have bottomed out. With very low valuations, increased buyout activities by Chinese tech giants and favorable technical indicators, the market is showing signs of recovery. Positive corporate earnings announcements and official efforts to reinvigorate China’s ailing real estate sector likely helped the fund gain ground in the second quarter (read: Time for China ETFs?).
The story continues
WisdomTree India Earnings ETF (EPI) – Up 12.1%
This is another country that soared in the second quarter on its electoral hopes. Market-friendly leader Narendra Modi was expected to continue governing, leading to a sharp rise in Indian stocks at the start of the second quarter. Although the initial election result hit these stocks hard (with Modi’s popularity appearing to wane), the formation of another Modi-led coalition government restored market momentum in late June.
Franklin FTSE Taiwan ETF (FLTW) – Up 11.1%
The fund invests approximately 24% of its weighting in Taiwan Semiconductor Manufacturing Company (“TSMC”). The stock has surged 24.7% so far in the second quarter on the ongoing AI boom. TSMC is crucial for the production of high-performance components needed for AI applications. Investors should note that Taiwan’s economy and markets are heavily influenced by its high-tech sector, thanks to its significant contributions from the semiconductor industry (read: 4 domestic ETFs that will benefit from the technology boom AI).
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iShares MSCI Japan ETF (EWJ): ETF Research Reports
iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports
iShares China Large-Cap ETF (FXI): ETF Research Reports
WisdomTree India Earnings ETF (EPI): ETF Research Reports
iShares MSCI ACWI ETF (ACWI): ETF Research Reports
iShares MSCI Eurozone ETF (EZU): ETF Research Reports
iShares MSCI Turkey ETF (TUR): ETF Research Reports
iShares MSCI South Africa ETF (EZA): ETF Research Reports
Vanguard FTSE All-World ex-US ETF (VEU): ETF Research Reports
Franklin FTSE Taiwan ETF (FLTW): ETF Research Reports