International Report: Q4 2019

The Global X International Report can be viewed here. The report summarizes market and macroeconomic developments across our International Access Suite. For a closer look at China Sector, see the latest Q4 China Sector Report.

 

Summary

Toward the end of 2019, high valuations, muted earnings growth, and a pause from the Fed in US equity markets helped boost investor interest in the international equity markets. The announcement of a Phase One trade deal between the US and China reaffirmed such interest and over the last quarter of 2019, all the ETFs in Global X’s International Access Suite posted positive returns.

Except for the Global X MSCI Norway ETF (NORW) and the Global X MSCI Nigeria ETF (NGE), all of the Global X Single Country ETFs outperformed the benchmark MSCI All World Country index (ACWI) over the quarter. Four of the International Access funds, the Global X MSCI Pakistan ETF (PAK), the Global X MSCI Argentina ETF (ARGT), the Global X MSCI China Large Cap ETF (CHIL), and the Global X MSCI Colombia ETF (GXG) also outperformed the benchmark MSCI Emerging Markets Index during the period.

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. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

For performance data current to the most recent month end and for standard performance, please visit globalxetfs.com.

International Performance Q4 2019

Source: Bloomberg as of Dec 31, 2019

Performance shown is past performance, based on the NAVs of the underlying sector ETFs 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. To view standard performance each of the funds, please click on the links available under “Related ETFs” below this post.

 

Notable Performers

In terms of single-country exposure, the Global X MSCI Pakistan ETF (PAK) was the best performer over the quarter. PAK rebounded from a low earlier in the year and posted a robust 27.28% return for the quarter after Moody’s upgraded the country’s outlook to stable from negative.1

The second best single-country ETF performance within the suite was the Global X MSCI Argentina ETF (ARGT), which returned 16.79% in the quarter. Of these ETFs, ARGT was also the best performer in December, providing some relief to the markets after a massive sell-off following presidential primaries in August. ARGT began recovering towards the end of the year after President Fernández appointed a cabinet that seemed to suggest political pragmatism rather than polarization. The administration also expressed support for restructuring Argentina’s $100 billion of debt, spending on key infrastructure projects, and policy buttressing the energy sector. 2, 3, 4

After trade tensions stretching 18 months, the US and China agreed to a partial trade deal that ignited a rally in both equity markets.5 Performance across Chinese sectors was mixed, but the Global X MSCI China Large-Cap 50 ETF (CHIL) returned 25.45% in 2019, with roughly half of the gains seen in the last quarter.

The Global X MSCI Colombia ETF (GXG) also performed well, returning 12.58% in Q4 and 30.12% over the course of 2019 due to higher-than-expected economic growth and strong domestic consumption. Colombia received recent praise from the IMF for promoting growth within its communication and business services and for its long-term contributions to global growth.

With a return of 49.33% for the year, the Global X MSCI Greece ETF (GREK) was the best performing Global X single country ETF for 2019. During the year, Greece was a rare bright spot in a Eurozone coming to grips with the need for more potent stimulus and structural reform. Improving macro data, proactive policy from the New Democracy party, and a strengthening financial sector seem to encourage bullish behaviors towards Greece’s long-term growth trajectory. GREK’s performance reflects what appears to be growing optimism in an economy that was battered down for years.

More strong performance in Q4 from Europe came from the Global X MSCI Portugal ETF (PGAL), which returned 10.92% and Global X DAX Germany ETF (DAX), which returned 9.68%. The German economy began showing signs of a recovery after the former head of the International Monetary Fund (IMF) Christine Lagarde assured markets of her intentions to continue the bond-buying program as needed in the first speech she gave in her new role as the President of the European Central Bank (ECB).6