Comments on: An easy way to invest in Australia, Canada or South Africa

By: The Investor

The Investor — Sun, 31 Jan 2010 17:28:21 +0000

@SMSFs – Thanks for the info. I keep an eye on the Australian property market due to relations and occasional daydreams of moving there, and it does seem to have exploded, although with the weak pound it’s a complicated picture. Still, what you get for your money out there still seems incredible, if Relocation Down Under, a TV show with property bloke Phil Spencer, is anything to go by.

Re: Those stats in The Economist, backs up another recent survey: http://www.themovechannel.com/news/227a9594-adc2/

By: @SMSFs

@SMSFs — Sun, 31 Jan 2010 05:28:32 +0000

Did 15+ years in London. Yeah I normally invest outside Oz - but more knowledge of other markets than anything else (and don't understand resources stocks). There are some disquieting things here. The Economist recently did a house price comparison based on rental yield for example - had Australia about 50% overvalued and one of the top 3 overvalued housing markets worldwide (think the other two were Spain and Hong Kong). UK 'only' 30% overvalued now in same study... The index in Australia is also heavily financial in sector terms last time I looked - even more so than resource stocks .-= @SMSFs on: The volatile world of the video games investor =-.

By: The Investor

The Investor — Fri, 29 Jan 2010 09:55:59 +0000

@SMSFs – You’re a lucky man, with your $A to spend! Could be as good as it will get in the cycle for the Aussie dollar – commodities strong in early recovery, and Australia ahead in raising interest rates? Who knows, but in your shoes I’d be diversifying out of it.

You’re Australian but you did a stint in London, right? It has literally been cloudy / snowy / grey here for three months, bar maybe three days. You know the score.

By: @SMSFs

@SMSFs — Fri, 29 Jan 2010 04:01:09 +0000

There is an older iShares Oz fund http://www.google.com/finance?q=NYSE%3AEWA – coincidentally I was using it to benchmark my SIPP and it is down about 10% over the period I was looking at (April 2008 to date).

I like the idea of this as a pre-emigration strategy though (I wouldn’t blame you for abandoning the UK … (-: ).

I wish there were more rollup funds as you say – Deutsche seems to favour them more for some reason.

On the ETF side though I more tempted by the different weighting methodologies though as I hold a few country ETFs already. Actually as an $A holder one of the most interesting country ETFs at the moment might just be the UK – god knows there is a bit of pessimism already in the market!

But there does seem an intrinsic issue with market cap weighted ETFs … it certainly goes against my contrarian leanings people like Dimensional seem to outperform. I’d love to know what’s out there that’s better (I already own IUKD). An article perhaps …. maybe we should even split it into a two-parter …. (-:
.-= @SMSFs on: The volatile world of the video games investor =-.

By: Tax Guy

Tax Guy — Fri, 29 Jan 2010 02:53:52 +0000

I like the idea of ETF’s but there is additional currency risk. With the Canadian Index fund the ETF is investing in Canadian companies, primarily with Canadian dollars but the fund is valued in US dollars … and the investor must convert to US.

By: The Investor

The Investor — Wed, 27 Jan 2010 13:12:48 +0000

@Faustus – Thanks for the idea, but I’d be slightly wary of that particular high yield ETF as a long-term play, to be honest. If it’s anything like the UK version (IUKD) it will be more like a high-risk recovery fund than a traditionally more stable dividend-focused security.

What do you think of the idea of using these single country funds ahead of emigration, as I mention in the article? I almost wonder if that’s why iShares has decided to add them to the mix.

By: Faustus

Faustus — Tue, 26 Jan 2010 22:24:55 +0000

Perhaps an alternative to the Australian ETF would be the Asia-Pacific High Yield ETF (IAPD), which is 50% invested in the Australian market, and has a distributing yield of about 3.7% currently.

In any case, these economies have good prospects: Canada had the mildest downturn of all the G7 economies, and Australia escaped recession entirely.

Single nation funds though are always more risky. Perhaps what we really need a ‘Commonwealth’ ETF covering the key markets in the former British empire!

By: The Investor

The Investor — Tue, 26 Jan 2010 16:29:18 +0000

@Neal – I agree, but provided the charges don’t creep up too far above normal ETFs then it’s hard to knock the flexibility. Totally agree about the risk.

@Lemondy – Indeed. In the US less popular ETFs have also suffered from being closed down (from memory at inopportune times – e.g. ETFs than track hedge fund indices).

Thanks for the comments guys.

By: Lemondy

Lemondy — Tue, 26 Jan 2010 14:36:52 +0000

The spread on the less popular iShares ETFs can be quite bad (c. 1%) which is something else to watch out for.

By: Neal @ WealthPilgrim.com

Neal @ WealthPilgrim.com — Tue, 26 Jan 2010 12:41:38 +0000

Personally, I’m not a huge fan of investing in country or industry ETF’s. I think it’s important to keep in mind the risk of doing so – and my experience tells me that few people do.

Having said that, these ETF’s might be a great fit for the right investor. Thanks for bringing them up.
.-= Neal @ WealthPilgrim.com on: Roth IRA Conversions Can Wreck Your Tax Credit for Homebuyers =-.