International Report: Q3 2021

The Q3 2021 Global X International Report can be viewed here. The report summarizes market and macroeconomic developments across our International Access suite of ETFs. For a closer look at China Sectors, please see the latest China Sector Report: Q3 2021.

Summary

International equities delivered mixed results in Q3 as the Delta variant strained the global recovery. Governments are changing their expectations accordingly. Towards the end of Q3, countries like Singapore and Vietnam that staunchly adhered to a zero-COVID approach are beginning to embrace an approach of coexistence. The re-opening of international travel for these countries could have significant implications for Q4. Meanwhile, emerging market indices with exposure to China were dragged down by unprecedented regulations against Chinese tech, education, and gaming companies.

The US-based S&P 500 outperformed the MSCI ACWI, with gains of 0.58% for the S&P against a -1.05% decline for the ACWI. Emerging markets lagged further, with the MSCI Emerging Markets Index underperforming the ACWI by an additional -7.04%. Eight of Global X’s single country and regional funds outperformed the ACWI while four underperformed.

Source: Bloomberg as of Sep 30, 2021.

Performance is based on the NAVs of the ETFs. Performance shown is past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted.  

The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Returns for periods greater than one year are annualized. For performance data current to the most recent month end, please click on the fund links below.

Notable Performers

The Global X MSCI Argentina ETF (ARGT) was the suite’s top performer during Q3, posting gains of 7.33%. After a -9.9% contraction in 2020, Argentina moved towards recovery in Q3 2021.1 New COVID cases declined from a 7-day average of 20,610 on Jun 30 to 1,415 on Sep 30.2 This sustained decline allowed the government to gradually relax COVID restrictions, which helped reinvigorate the economy. Argentina is still in the process of renegotiating debt with the IMF as midterm elections in November draw closer.

The suite’s second best performer of Q3 was the Global X MSCI Colombia ETF (GXG), which increased by 5.48%. Like Argentina, Colombia also saw a steep fall in COVID cases. A 7-day average of 30,567 new cases on Jun 30 fell to 1,495 new cases on Sep 30.3 Colombia’s economy is expected to grow by 7.7% in 2021.4

Laggards

The suite’s worst performer in Q3 was the Global X MSCI Pakistan ETF (PAK), which delivered negative returns of -14.40%. The threat of regional instability looms over Pakistan after the Taliban ousted Afghanistan’s government in August. Afghanistan’s crisis elevated demand for food, which Pakistani officials are worried could translate into inflation. At the same time, Pakistan grappled with a surge in COVID cases that peaked in August as well as challenges in the Energy sector. It is worth noting that Pakistan was the only Global X international suite ETF that underperformed the MSCI Emerging Markets Index.

Meanwhile, the Global X DAX Germany ETF (DAX) delivered returns of -4.05%. After months of campaigning, Q3 ended with a close Bundestag election in which the Social Democratic Party of Germany outperformed outgoing Chancellor Merkel’s Christian Democrats. The election occurred as supply chain bottlenecks and rising energy prices took some steam out of Germany’s recovery. In particular, a dearth of semiconductors presented challenges for auto manufacturers.

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