Top 3 ETFs for Investing in the Most Promising Markets of the 2nd Half of 2024

Global Stock Markets Overview

The Stoxx 600 and the Nikkei 225 both reached all-time highs earlier this year, alongside the S&P 500.
However, the Stoxx and the Nikkei are currently trading at much more attractive valuations compared to the S&P 500.
Data from FactSet reveals that the Stoxx is trading at 15 times the past 12 months’ earnings, while the Nikkei has a multiple of 23.
Meanwhile, the S&P 500 is showing an earnings multiple of 27.

Opportunities for Value Investors

According to Bob Armstrong, strategist at Schroders, investors seeking undervalued stocks should look overseas.
Armstrong believes that this trend is likely to continue, presenting an opportunity for investors to find compelling investments at a more affordable valuation.

Japanese Market Outlook

Armstrong is particularly optimistic about the Japanese market, where he sees the country emerging from a decade-long bear market in the context of global growth.
He also highlighted the Tokyo Stock Exchange’s initiative to push companies to enhance their profitability and corporate governance.
These measures have led to more efficiently managed stocks with record dividends and buybacks.

European and UK Markets

Both the UK and Europe overall appear promising, as per Armstrong.
Despite concerns about a potential energy crisis and escalating tensions between Russia and Ukraine, Europe has continued to positively surprise.
The first-quarter earnings season in Europe has delivered some of the best earnings growth in recent years.
Additionally, these markets could receive a boost with the beginning of interest rate cuts by the European Central Bank and the Bank of England.

ETF Investment Options

While Armstrong did not disclose specific stocks, investors looking for exposure to foreign markets can consider exchange-traded funds (ETFs) as a means to achieve this.
Three examples include:

1) iShares MSCI Japan ETF (EWJ): Up 11% year-to-date with a 0.5% expense ratio.

2) iShares Core MSCI Europe ETF (IEUR): Increased by 6% in 2024 with an expense ratio of 0.11%.

3) Franklin FTSE United Kingdom ETF (FLGB): Gained 8% this year and has an expense ratio of 0.09%.

For further information on investment opportunities, it’s recommended to carefully research and consider the options that best align with individual financial goals and risk tolerance.

Please note that the information provided in this article is for informational purposes only and should not be considered as investment advice.
Readers are encouraged to conduct their own research and exercise caution when making investment decisions.