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Global / International  Exchange Traded Funds - October 11, 2008

Which county's Stock Market has the best value and what is the ETF symbol to invest in that county?

After the 2008 Market Crash, do bargains abound?

This article provides a list of selected Global Exchange Traded Funds (ETFs). It also provides the available fundaments (P/E ratio and dividend yield, and price to book value ratio) and the Management Expense Ratio (MER) of each ETF. The intention is too provide a broad list of ETS covering major countries.  This list is not intended to cover various industry segments but rather to cover counties.

Click here, for an analysis of Canadian ETFs and Market segments.

With this information, investors can make a judgment as to the desirability of various Country ETFs and provides the trading symbol under which each can be purchased. (Or sold short for that matter).

While it can be very difficult to interpret whether a particular P/E ratio is attractive or not, it is useful to be aware of these ratios. Note that most of the indexes are "capped" which means that the contribution of any one company to the index is capped or limited to a certain level.  In some cases the P/E ratios may not be the raw trailing P/Es but may be massaged to remove extraordinary items. ishares has told us they "massage" the P/E for the S&P 500 index and they may do that for all of them. Also these P/E ratios will soon be out of date as the market moves. Still they offer an indication of valuation.

In buying or selling any of these ETFs be cautious about the trading volume and the bid/ask spread. Higher volume ETFs are preferred, all else being equal.

If you are interested in Global ETFs that trade in the U.S. an excellent source of information is www.ishares.com I have taken much of the information below from www.ishares.com. You can go there for updated P/E information and to see the individual companies within each index.

In buying any of these, be careful to double check the trading symbol with other sources. I believe the symbols below are correct, but please double check. A wrong symbol could lead to to the wrong investment.

 The Following ETFs Trade in the U.S. All of these subject Canadian investors to currency risk between the Canadian dollar and the currency in the country of the index.

If you are interested in Global ETFs that trade in the U.S. an excellent source of information is www.ishares.com I have taken much of the information below from www.ishares.com. You can go there for updated P/E information and to see the companies within each index.

The P/E and ratio information was taken from ishares as at Sept 30. There was a large adjustment in most cases to reflect the ETF price as of October 11.

At ishares.com you can quickly see the P/E ratio for a wide variety of country, world region, or sector ETFs.

I have very little to no knowledge of the economic outlook in these areas or the political or the currency risks. Comments here are simply based on the P/E ratio and price to book ratio.

Country Index  Trailing P/E  Dividend Yield % Price to Book ratio  ETF  Comment
 Europe, Australia and Far East 11.0 5.56 1.82  EFA (MER 0.35%)

Canadians can buy XIN on Toronto, hedged in Canadian dollars (MER  0.50%)

 Gives broad exposure to Europe, Australia and the Far East.

Appears attractive

 U.S. S&P 500 13.7

(S&P indicates 17.8)

3.10 2.76 I V V (MER 0.09%)

Canadians can buy XSP on Toronto, hedged in Canadian dollars (MER  0.24%)

 500 of the largest U.S. companies. Looks reasonably attractive based on the P/E reported by ishares. ishares tells me they exclude extraordinary items and negative earnings
 Global 100 11.1 3.41 2.33  IOO (MER 0.40%)  Appears attractive
 Europe 350 10.3 6.79 1.97 IEV (MER 0.60%)  Appears very attractive.
 China 25 Index 10.4 2.71 1.84 FXI (MER 0.74%)  Appears attractive. With only 25 companies it is dominated by a few companies and therefore is more volatile.
 Japan 13 2.33 1.12 EWJ (MER 0.54%)  Japan is of interest as the second biggest economy in the world. P/E is neutral but price to book is quite attractive. May be worth considering.
 United Kingdom 9.8 7.19 2.47  EWU (MER 0.54%)  U.K. seems quite attractive compared to North America.
 Australia 11.5 8.51 2.29  EWA (MER 0.51%)
 Hong Kong 10.1 4.26 2.15  EWH (MER 0.52%)
 Brazil 7.7 4.02 1.93  EWZ (MER 0.68%)  Appears very attractive but consider the currency risk
 BRIC Countries 9.4 2.25 1.91  BKF (MER 0.75%)  seems attractive
 China Hong Hong Listed 10.2 0.73 1.82  FCHI (MER 0.74%)  seems attractive
 Italy 7.2 9.62 1.15  EWI (MER 0.54%)  Italy has one of the lowest P/E ratios that I found. I am vaguely aware that Italy has a reputation of political instability.
South Korea 10.2 2.55 1.48  EWY (MER 0.68%)  Seems attractive. Buffett has mentioned South Korea as attractive

Investors may wish to consider the expected growth or contraction of the earnings that are driving the P/E for a particular segment. High growth can justify a high P/E and low or negative growth leads to lower P/E ratios. More recently, a global financial crisis has pushed P/E ratios down.

To see a chart of the past performance of any of the ETFs enter the symbol below and click, there are options there to show you up to a five year chart.

Note that the charts of Global ETFs that trade in the U. S. are in effect distorted by currency movements. The graph does not show just the movement of the country index, but rather the country index in U.S. dollars.

END

Shawn Allen, CFA, CMA, MBA, P.Eng.

President, InvestorsFriend Inc.

October 11, 2008

www.investorsfriend.com

What did you think of this Article or Page? I would value your feedback at shawn@investorsfriend.com  (please indicate the subject of the article)

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