Zacks.com ETF Strategist Eric Dutram highlights: ETFs for the Most Competitive Countries on Earth

CHICAGO, Sept. 7, 2012 /PRNewswire/ -- Funds in this article include: iShares MSCI Sweden Index Fund (EWD), MSCI Finland Capped Investable Market Index Fund (EFNL), iShares MSCI Singapore Index Fund (EWS), and the First Trust Switzerland AlphaDEX Fund (FSZ).  Eric Dutram looks at a few country specific ETFs for investors looking to target the most competitive economies in the world.

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ETFs for the Most Competitive Countries on Earth written by Eric Dutram of Zacks Investment Research:  

As the world economy becomes more intertwined, competition between various nations is becoming more intense. As a result, a great focus has been on establishing a more business-friendly climate with stable institutions, quality infrastructure, robust market access, and a top-notch workforce.

For investors seeking to ascertain which nations have done the best in developing a well rounded economic environment, there is a yearly ranking that is done by the World Economic Forum which looks to quantify competitiveness into a raw form. In this way, the organization ranks 144 nations on literally dozens of factors in order to find out which nations have done the best job in making their countries prime destinations for both investment and general business (read The Complete Guide to Preferred Stock ETF Investing). 

While not necessarily meant to be an indicator of top stocks, the ranking system could be utilized by investors to target nations that have made great strides in keeping up with the broad globalization trend and those that have made their economies well positioned to compete in the increasingly competitive world. In this way, some investors may be well served by looking more closely at a few of the top ranked nations for investment as stable choices in this uncertain economic climate.

After all, it is hard to argue that investors will feel safer in investing in some of the top, most competitive nations as opposed to their weaker and less stable counterparts. For example, it will be quite difficult to find investors willing to invest in the last ranked country (Burundi) over this year's top ranked nation of Switzerland (read For Europe ETFs, It Is Hard to Beat Switzerland).

In this latest iteration of the survey, it is dominated by small nations mostly in the West or those with strong ties to the region. Meanwhile, the United States, which was fifth last year, has slipped for the fourth year in a row, down to the rank of 7^th.

Given this decline by the U.S. and the proliferation of country-focused ETFs, it could be time for investors to look to other, more competitive nations for investment instead, especially if the United States continues to become less competitive. In light of this, we have highlighted a few ETF picks below which target some of the only nations to beat out the USA in terms of global competitiveness (see the full PDF report here):

Sweden

Sweden currently ranks fourth in global competitiveness, a slight decline from where the nation was a few years ago when it was ranked second. Still, the nation ranks extremely high for technological factors, innovation, and strength of institutions, making it a quality investment destination.

Sweden has one of the more popular, and older, ETFs in the Nordic region with its iShares MSCI Sweden Index Fund (EWD). The product charges 51 basis points a year in fees but sees robust average daily volume of nearly a quarter million shares and AUM of $360 million.

Industrials and financials make up just over half of the portfolio while tech, consumer discretionary, and telecoms round out the top five. From an individual security perspective, the product isn't too concentrated among its 36 holdings, although it does afford more than 7.5% to the top three.

Finland

Surging up the rankings over the past couple of years is the investment darling of Finland. The small nation is quickly catching up to its Nordic counterpart in Sweden thanks to its unmatched institutional framework, top notch education system, and low levels of corruption and crime (read Beyond Germany: Three European ETFs Tracking Strong Countries).

The only choice in the Finnish ETF market is a relatively new fund from iShares, the MSCI Finland Capped Investable Market Index Fund (EFNL). The product charges investors 53 basis points a year in fees but still hasn't caught on yet, as it has paltry trading volumes and AUM.

For the rest of this ETF article, please visit Zacks.com at: http://www.zacks.com/stock/news/82373/etfs-for-the-most-competitive-countries-on-earth

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