The U.S. economy is strong and is benefiting a great deal from the energy transition and the advent of artificial intelligence. Indeed, the Federal Reserve estimates that the economy will grow at a very rapid annualized rate of 3.5% this quarter. Still, America is facing rather large risks, including tremendous political polarization and gigantic, out-of-control government debt. Either of these two issues could easily trigger a huge crisis in the U.S. within the next year, causing American stocks to tumble. I believe that overseas stocks should account for a meaningful percentage of investors’ portfolios. One easy way to accomplish that goal is by owning ETFs that are based on the stocks of other countries. Here are the three best country ETFs to buy.
Many huge companies are closing down factories in China and opening up plants in other countries. Vietnam is hosting many of these new factories. Among the multinational firms that have recently built plants in Vietnam after shutting down facilities in China are Apple (NASDAQ:AAPL), Samsung, Nike (NYSE:NKE), and LG. This makes the VanEck Vietnam ETF (CboeUS:VNM) one of the best country ETFs to buy.
In light of this situation, it’s not too surprising that the Vietnamese economy grew at a huge 5.66% clip last quarter year-over-year. The country’s manufacturing and construction sector expanded at a very impressive 6.3%. And the fact that the country is looking to cut its interest rates will likely be positive for Vietnamese stocks.
Also encouragingly, VNM stock climbed 7% between April 19 and May 29.
In upbeat news for South Korea, various economists and organizations recently increased their GDP growth forecasts for the Asian country by 0.4% or more. The Organization for Economic Cooperation and Development now anticipates that the country’s GDP will grow at a rate of 2.6% in 2024. Similarly, Moody’s increased its outlook for the country’s growth rate to 3% earlier this month. Additionally, South Korea and the U.S. now are expected to expand at the fastest rates among developed economies in 2024. As a result, I’m bullish on the iShares MSCI South Korea ETF (NYSEArca:EWY)
The country is benefiting both from stronger-than-expected demand for its exports and domestic consumption trends that surpassed expectations. South Korea’s exports are being lifted by positive economic trends in the U.S. and China, two of the nation’s largest trading partners.
Moreover, the South Korean economy is getting a boost from strong demand for computer chips amid the proliferation of AI,. According to Investopedia, South Korea’s Samsung is the world’s largest semiconductor company based on revenue.
Goldman Sachs recently increased its 2024 economic growth forecast for India slightly to 6.7%. The investment bank expects the country’s economy to benefit from the government’s strong infrastructure spending. And Goldman still expects India’s interest rate to be cut at the end of the year. Given all of these points, I believe that the Wisdom Tree India Earnings Fund (NYSEArca:EPI) is one of the best country ETFs that will rise a great deal in the medium to long-term.
India is currently in the midst of an election. However, a former governor of the country’s central bank recently predicted that the country’s economic policy would remain on its current, successful path regardless of who wins the contest.
