Exposure to foreign stocks through ETFs

In an article I recently read, http://www.usafairtrade.com/icplan.htm, Warren Buffet mentions that he’s investing in foreign currency due to the weakening US dollar. The general consensus seems to be that the dollar will be weakening for a while (maybe a year though possibly longer according to Buffet).

I live in Korea, so my Korean salary is becoming more valuable in terms of US dollars but my US stocks are becoming less valuable in terms of Korean won. I plan to keep my investments in the US and in dollars, but I would also like to make money. A declining dollar may mean declining US stock prices.

The question then becomes how to invest in foreign stocks. For me the answer is to invest in exchange traded funds or ETFs. The ticker symbol IOO tracks the S+P global 100. This includes big US companies but also big foreign companies: the top ten holdings are AMER INTL GROUP AIG, BP Plc, CITIGROUP C, EXXON MOBIL XOM, GENERAL ELEC CO GE, Hsbc Hldgs, INTEL CORP INTC, MICROSOFT CP MSFT, PFIZER INC PFE, WAL-MART STORES WMT.

Then there’s EFA. the summary:

The fund uses a representative sampling strategy in order to try to track the MSCI EAFE Index. The fund invests in stocks from Europe, Australia, and the Far East with concentrations similar to those of its index.

Finally, there’s EPP

The iShares MSCI Pacific ex-Japan Index Fund seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Australia, Hong Kong, New Zealand, and Singapore markets, as measured by the MSCI Pacific Free ex-Japan Index.

Comments are closed.