For anyone looking for some inspiration and exposure to offshore ETFs, we’ve compiled a list of the top 10 ETFs traded on our Webtrader platform. All these ETFs are listed abroad and available to purchase on our Webtrader platform.
Vanguard S&P500 (VOO): By far the most popular ETF that is traded on the platform. It is exposed to the S&P500 index and over 50% of the companies on this index derive their earnings globally. This means you’d still be getting global exposure by purchasing this instrument. Furthermore, it was endorsed by Warren Buffett. It also carries a very low Total Expense Ratio (TER), the internal costs of running the fund, of just 0.05%.
iShares Edge MSCI USA Quality Factor ETF (QUAL): This ETF follows the MSCI USA Neutral Quality Index, also US based. It tracks large and mid-cap stocks (about 125 stocks) but only those that have favorable variables when it comes to ROE, Debt to Equity and EPS – in other words, the highest quality companies. It has a slightly higher TER at 0.15%.
Select Sector Health Care SPDR Fund (XLV): Companies included in this ETF are pharmaceuticals, healthcare providers and biotechnology. Notable inclusions are Pfizer, Johnson & Johnson and Abbott Laboratories. Health care has typically been a defensive sector and it largely explains its appearance in the top 3. YTD performance has been exceptional with total returns of 9.9%.
SPDR S&P500 ETF Trust (SPY): This is an alternative to the popular VOO, and the oldest listed ETF. Due to its structure, which was common in earlier ETF products, the fund cannot re-invest dividends and the ETF will pay out dividends 4 times annually. TER is slightly higher than the VOO at 0.09%
Vanguard Total World Stock ETF (VTI): Tracks the performance of the FTSE Global All Cap Index. Over half of it is exposed to the US and about a fifth in Europe. It is considered to be a moderate to aggressive fund and should be invested in if you have an investment horizon of more than 10 years. This is attributed to the fact that 10% of the fund is exposed to largely volatile emerging markets.
Powershares High Yield Equity Dividend Achievers ETF (PEY): This fund uses the Nasdaq US Dividend Achievers 50 Index for its underlying exposure. It typically invests at least 90% of its total assets in dividend paying common stocks within the index. The returns YTD have however been flat. This fund is a great way to get exposure to high dividend yield companies which include AT&T and Verizon Communications.
iShares Dow Jones US Technology Sector Index Fund (IYW): With exposure to 136 securities in the IT space including electronics, software and hardware, this ETF provides an investor with targeted industry returns. It has an almost 20% combined exposure to Apple and Microsoft, making it a good entry point for exposure to these instruments.
Vanguard FTSE Europe (VGK): For investors seeking exposure to the Eurozone, this ETF has 30% exposure to the UK. It’s important to be aware of this as Brexit negotiations go on. Furthermore, it has roughly 15% exposure to France, Germany and Switzerland. Because of its large exposure to the UK, it is considered an aggressive fund and is therefore riskier. Key companies include Nestle, HSBC, Unilever and British American Tobacco.
Vanguard High Dividend Yield ETF (VYM): This fund tracks shares forecast to have above-average dividend yields. It has shown growth of 2.5% YTD. Further to that it has a TER of just 0.08%, which is extremely cheap.
Vanguard FTSE 100 ETF (VUKE): This is the only ETF on this list that is traded on the LSE. The clue is in the name regarding its underlying constituents. It has 95% exposure to the UK and about 20% exposure to the financial services sector. It has given a decent YTD return of 6.66%, which, given the post Brexit vote and the negativity around this event, is still a feat!