Over the past few years, many investors have avoided developed international equity markets for a variety of reasons: anemic growth, disappointing economic data and geopolitical uncertainty. Brian Manby discusses reasons why investors should be optimistic about international equities again.
Conventional wisdom says we are living in a fixed income world. Fear and uncertainty in the markets have crowded investors into areas of perceived safety, such as money market funds, U.S. Treasuries, investment-grade bonds and even cash. Despite an aging population’s need for income and capital appreciation, many say there is simply no appetite for stocks.
Due to their intraday liquidity and convenience as trading tools, ETFs are a fast and efficient way to express investment sentiment about a given sector, asset class or region. For this reason, ETFs can serve as price discovery tools as well as leading indicators of a shift in broader market sentiment.
Will actively managed ETFs power the next leg of industry growth, or will active management remain the domain of such traditional investment structures as mutual funds and hedge funds? While most media stories depict a slow start and uncertain future, I see just the opposite.