Proprietary Data Insights
Top International ETF Searches This Month
Things feel bad at home. Economically at least. So maybe it makes sense to consider international exposure.
Stealing some of our own thunder, as you’ll see when you scroll the page, things are bad – pretty, pretty bad – elsewhere around the globe.
So The Juice decided to hit up our proprietary Trackstar database of the tickers investors are searching for. We focused on ETFs with “international” or “world” in the title. We didn’t use “global” because they tended to be sector-specific funds.
Anyhow, here’s how the Trackstar ETFs have performed:
Source: Google Finance
About the same or worse performance for all the most searched international funds versus the S&P 500 (SPY) (down 11% year over year), except for one.
That one makes sense in the present environment.
Invesco International Dividend Achievers Fund (PID)
The Juice loves dividend aristocrats – companies that have raised their dividend payments every year for at least 25 consecutive years. Investors often flock to these income-producing stocks during times of economic turmoil, be it a recession, inflation, and/or rising interest rates.
But there’s another category of sound dividend stocks – dividend achievers. Companies that have at least a 5-year streak of dividend increases.
The Invesco International Dividend Achievers Fund invests 90% of its portfolio in the stocks that comprise the NASDAQ International Dividend Achievers Index.
More than half of PID’s allocation stays close to home – just north of the border and across the pond.
No surprise large-cap stocks make up a majority of PID’s holdings with utility, financial, energy, and materials stocks the largest concentrations at just over 52% of the portfolio.
As expected, relative to other international ETFs and the ETF that tracks the S&P 500, PID has done well. Given that, again, it focuses on a popular area to put cash to work during the not-so-best of global times.
The next two years could be “rough for investors.” But this Top 20 Living Economist says 3 stocks could 10X… thanks to Biden’s bungling. Go here for his stunning prediction – in what he’s calling The Biden Disaster Plan.
The Country Experiencing 70% Inflation
Source: Pew Research Center
You can look at inflation one of two ways.
Most commonly, we make annual comparisons.
You see the headlines – 8.6% inflation in the US. This means inflation is 8.6% higher than it was at this time last year.
The map uses year-over-year data, which pretty much puts the US in the middle of the pack.
However, 8.6% pales in the comparison to Turkey’s Q1 number – 54.8% inflation. Almost unbelievably, that number ticked higher in May, to 73.5%.
A confluence of factors, including the war in Ukraine and last year’s decision by the government to cut interest rates – amid rising inflation – triggering a crash in Turkey’s currency, the lira.
You think you got it bad? Year-over-year, the cost of food and non-alcoholic beverages are up nearly 92% in Turkey. The transportation sector, which includes energy, popped almost 108%.
Another Way To View Inflation
You can also consider the change in a country’s inflation rate over time. If you use this metric, things don’t look so bad for the US.
While the US has the 13th highest annual inflation rate of the 44 countries Pew looked at, we come in 19th when you gauge the actual change in the number over the last two years.
Israel’s inflation rate is 25x higher today than it was two years ago. However, on an annual basis, Israel has 99 problems and inflation ain’t one. The country has historically low inflation, registering an annual rate of just 0.13% in Q1/2020. So 25x higher than that equals a mere 3.36% in Q1 of this year.
With data, context means everything.
That said, it can still be an economic shock on the ground.
For example, Italy’s inflation rate was just 0.29% in Q1/2020. In the first quarter of 2022, it hit 5.67%, a twenty-fold increase.
Source: US Inflation Calculator
As the historical data on inflation shows, we’re experiencing similar pain in America as many of our brothers and sisters around the world.
It’s nice to know you’re not alone. Misery loves company.
The Bottom Line: Inflation and uncertain economies are a global problem. There’s talk of a major recession gripping Europe. In fact, some say it has already started.
If you’re looking to diversify your investments during these times, proceed with caution. Consider big dividend payers – blue chips based in the US – who tend to persist, if not do relatively well during periods of inflation and economic contraction. From there, you might think about taking chances on dividend payers – probably via an ETF or mutual fund – with international exposure.
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