As we were applying our technical analysis to more than 800 ETF charts, we decided to stop halfway through to focus on one major new trend. International ETFs appear to ready to deliver outperformance in the weeks and months ahead. We found 18 new buy signals in our international ETF universe and there were almost as many within a dollar or two of joining the club. We wouldn’t be surprised to see many of the near misses in our report next week.
For those of our readers that don’t have any international exposure, consider this gem from Princeton professor Burton Malkiel’s book A Random Walk Down Wall Street. Reporting on the results of his 20 years of research, he wrote:
”It turns out that the portfolio with the least risk had 24% foreign securities and 76% U.S. securities. Moreover, adding 24% [Europe, Australia, and Far East] stocks to a domestic portfolio also tended to increase the portfolio return. In this sense, international diversification provided the closest thing to a free lunch available in our world securities markets. When higher portfolio returns can be achieved with lower risk by adding international stocks, no individual or portfolio manager should fail to take notice.”
The international ETFs with new buy signals include:
BLDRS Emerging Markets 50 ADR Index (ADRE)
iShares S&P Asia 50 Index (AIA)
SPDR S&P BRIC 40 (BIK)
iShares MSCI BRIC Index (BKF)
WisdomTree DEFA (DWM)
iShares MSCI Sweden Index (EWD)
iShares MSCI Spain Index (EWP)
iShares MSCI France Index (EWQ)
iShares MSCI South Africa Index (EZA)
SPDR DJ EURO STOXX 50 (FEZ)
PowerShares FTSE RAFI Emerging Markets (PXH)
iShares MSCI EAFE Value Index (EFV)
iShares MSCI Hong Kong Index (EWH)
SPDR S&P Emerging Asia Pacific (GMF)
SPDR S&P China (GXC)
Claymore/AlphaShares China Real Estate (TAO)
iShares FTSE/Xinhua China 25 Index (FXI)
PowerShares Gldn Dragon Halter USX China (PGJ)
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