Aside from oil, these ETF’s offer great value because:
1). While the U.S. stock market is trading at all-time highs, both of these ETF’s are trading below their 2007/2008 highs. Russia in particular has seen a depressed stock market.
2). Since the recession Canada has seen stronger growth (GDP) and lower unemployment than the U.S.–about a percentage point better on each since 2010. Meanwhile, Russia’s unemployment rate has been far lower than the U.S. rate over the past year, hovering around 5%-6%.
Both of these ETF’s represent value, but the growth story really relies on energy. If you’re not feeling particularly bullish about the Russia/Canada energy bull—but still want some international growth–another ETF you might consider is the iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA: EEM). This ETF has large holdings in companies from high growth countries like Tawain (4%) and China (8%). It also holds many stocks from countries that are projected to lead their respective continent’s growth, like Brazil and Poland.
The best part is that DVYE offers growth prospects and a dividend yield of around 3.5%, which is something that’s hard to find in the U.S. Foreign interest rates and dividend yields largely outpace those in the U.S.
The ten second takeaway
With quantitative easing forcing us into a stock market that’s already at record highs, it’s easy to feel conflicted. That’s ok–I’m conflicted too!
Please take a moment to try this exercise. Close your eyes and imagine it’s the year 2025—what does that world look like? Which trends “won out?”
Now open your eyes. I strongly feel these investments will reflect many of those stories, don’t you? The difference is (hopefully) the market hasn’t completely noticed yet, and we still have time to invest.
We still need growth stories that we can trust–even at these levels.
The article Stocks are at Record Highs—but You Can Still Find Growth, Safely originally appeared on Fool.com and is written by Adem Tahiri.
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