Country ETFs: Winners and losers in 2012

Egypt Riots_edited-1Where were the best and worst places to put your money in 2012? In this article, ETF Database calls out the best and worst of the country exchange-traded funds (ETFs) for the year. It provides some important insights into what happened during the year—the good, the bad and the ugly of the political and economic news that drove market returns throughout 2012.

Overall, the list shows a few important trends:

  • Financials are driving growth in some emerging markets – In both Turkey and Thailand, ETFs with a tilt toward financials have consistently outperformed.
  • A few BRICs are crumbling – Brazil’s underperformance shows some cracks in the wall.
  • Politics doesn’t always drive performance – While political instability was a big factor in the underperformance of Russia and Argentina ETFs, Egypt powered ahead, despite huge political and social unrest.
  • Small caps don’t work everywhere – Small cap ETFs in Canada and Japan failed to deliver positive returns this year.

Below is my summary of ETF Database winners and losers at a glance:


MSCI Turkey Investable Market Index Fund (TUR, A-), Up 61.8%: Turkey’s market is hot right now, led by a booming financial sector and industrials, both of which get plenty of space in this index.

MSCI Philippines Investable Market Index Fund (EPHE, B), Up 47.6%: This growing economy provides excellent fodder for performance with this index of 50 publicly traded companies listed in the Philippines.

Egypt Index ETF (EGPT, C+), Up 46.0%: Despite intense political turmoil, Egypt’s economy is on the upswing after a year-long slump.

MSCI Poland Investable Market Index Fund (EPOL, B), Up 38.7%: Another emerging market hot spot that has managed to skirt the crisis. (It hadn’t yet adopted the euro in 2008.)

MSCI Thailand Index Fund (THD, A), Up 37.1%: More than 80 holdings with a focus on the hot Thai financial sector.


FTSE Argentina 20 ETF (ARGT, C+), Down 15.9%: In 2012, this was definitely a submerging market, with high inflation and political instability. But the government is trying to find a way to fix the problems, which bodes well for a better 2013.

Market Vectors Russia Small Cap ETF (RSXJ, C), Down 6.0%: Instability and riots in Russia haven’t done the markets any favours. This ETF wasn’t able to capture growth in the market.

IQ Canada Small Cap ETF (CNDA, C+), Down 5.4%: Small cap strategies don’t work in all markets. Canada’s energy slump has taken its toll on small caps in this country.

Japan AlphaDEX Fund (FJP, C), Down 4.9%: According to ETF Database, the strategy behind this ETF hasn’t managed to produce positive returns, even as Japan’s economy continues to grow.

MSCI Brazil Index Fund (EWZ, B+), Down 1.3%: Brazil was hot in 2011. Not so much this year—are Brazil’s best days behind it?