November 11, 2011 / 2:51 PM / 6 years ago

Four international ETFs to escape financial chaos

By John Wasik

Nov 11 (Reuters) - The financial troubles of Europe and the U.S. have become fiscal soap operas on a grand scale. If you’re an individual investor, where can you escape the endlessly singing fat lady?

There are just a handful of countries that are reasonably solid long-term investments. They are not without risk, yet their leaders have managed their economies better than most industrialized nations and they are thriving. The healthiest economies also managed to invest in their countries while avoiding the banking cyclones that are ravaging the U.S. and Europe.

Here are four places with a positive story: gross domestic product growth (GDP), top sovereign debt ratings, low or no budget deficits (relative to larger industrialized nations) and healthy domestic investment.


Anchored at the crossroads of Asia, this island nation is hardly blessed with abundant natural resources. It’s dependent upon its neighbors for nearly everything — except human capital. In this regard, it’s leveraged its resources well. It’s picked its niches carefully, excelling in financial services, pharmaceuticals and information technology.

As a result, its economy grew almost 15 percent last year. The government has embarked on a long-term program to turn the country into Southeast Asia’s major trading and technology nexus. As one of the wealthiest nations in Asia, it has a low jobless rate and small budget surplus; its per-capita GDP ranks it among the highest in the developed world. You can invest in a basket of Singapore stocks through the iShares MSCI SingaporeIndex ETF .


The smallest continent is home to some of the world’s largest mining operations and has plenty of customers from China and India. Its economy enjoys about 3-percent annual growth, it has a trade surplus, and a small budget deficit that may vanish in four years. The country only suffered one quarter of negative economic growth after the 2008 meltdown.

Prior to that, the Aussies experienced 17 straight years of expansion. It’s negotiating free-trade deals with China, Japan and Korea and has everything from coal to uranium to sell to Asian markets. One of the best ways to sample Australian stocks is through the iShares MSCI Australia Index ETF . Like most ETFs, it reflects the lion’s share of public companies in the country.


Canada not only largely avoided the 2008 meltdown, it’s benefiting from being the largest U.S. energy trading partner. Thanks to conservative bank-lending practices, Canada’s banks emerged stronger than other North American megabanks after the crisis. A major exporter of oil, gas and uranium, the country is seeking to build a pipeline to route even more oil from its Western fields — the controversial Keystone XL project.

Canada will continue to benefit from the voracious appetite in the developing world for commodities. Since its entire labor force is only 18 million — there are more people living in the Northeastern U.S. — Canada has plenty of resources to spare. Consider the iShares MSCI Canada ETF as a way to invest in the country’s largest companies.


This Scandinavian nation isn’t on most investors’ radar screens, even though it has plenty of hydropower, oil and a small population to support. While its GDP growth is minuscule, it has low unemployment and a budget surplus.

As the world’s second-largest natural gas exporter, the country shares the wealth with its people through various social safety-net programs, and saves for the future with a half-trillion-dollar sovereign wealth fund, which ranks among the largest in the world. Norwegians are among the most prosperous people on earth. You can invest through the Global X FTSE Norway 30 Index ETF .

If you bundle up your savings and invest in all of these ETFs, you’d be still subject to global market risk. If the European debt contagion somehow infects North American or Asian economies, then that could trigger downturns in emerging markets.

For big commodity and energy producers, contagion could be toxic — even my favored countries are certainly not completely immune. So think long-term and keep on diversifying risk away from countries with the worst balance sheets. Walk away from the noise to countries with poise.

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