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Wall Street has delivered a moderate performance in the second quarter of 2024, with the S&P 500 gaining 5.1%, the Dow Jones losing 0.4%, the Nasdaq advancing 8.6%, and the Russell 2000 retreating 2.3%, respectively (as of Jun 25, 2024). Key equity indexes have hit all-time highs in the quarter.
April became the worst month of 2024 for Wall Street due to rising rate worries, followed by a robust upswing in May and June. Wall Street’s performance clearly points to the broader market’s dependence on the “Magnificent Seven.” This bloc, which comprises NVIDIA, Microsoft, Apple, Amazon, Meta, Alphabet and Tesla, makes up about 30% of the S&P 500 and accounts for more than 40% of the Nasdaq-100.
The ongoing artificial intelligence (AI) craze, recent signs of cooling in inflation, and the resultant Fed rate cut bets, along with strong corporate profit growth, have been fueling investors' confidence in the stock market for the past two months.
What’s Brewing in Global Markets?
International economies have returned much lesser than the U.S. market. All-world ETF iShares MSCI ACWI ETF (ACWI - Free Report) , which has a significant share invested in U.S. equities, has added about 3.5% so far in the second quarter.
Vanguard FTSE All World ex US ETF (VEU - Free Report) is up 1.7% in the past three months. iShares MSCI Eurozone ETF (EZU - Free Report) has delivered a flat performance. iShares MSCI Japan ETF (EWJ - Free Report) is off 4.1%, while iShares MSCI Emerging Markets ETF (EEM - Free Report) has advanced 4.8%..
Against this backdrop, below, we highlight a few winning country ETFs of the second quarter.
Turkish stocks soared due to market-friendly measures installed by the government. The central bank of Turkey expects inflation to end the year at 38%, down from 75.45% recorded in May 2024. As a result, the central bank of Turkey left its key interest rate steady at as high as 50% in May. Meanwhile, president Erdogan won another term last year. Erdogan launched market-friendly policies and tried to mend its stern relationship with the West. Foreign investors responded to these developments positively.
iShares MSCI South Africa ETF (EZA - Free Report) ) – Up 16.7%
South African stocks jumped due to election hopes. While there were some upheavals at the start of June on early election results, the stock market gradually improved as political leaders agreed to a broad alliance to form the next government.
iShares China Large-Cap ETF (FXI - Free Report) ) – Up 13.2%
Chinese shares were under pressure last year due to the government’s anti-growth policies, and the real estate crisis. But it looks like Chinese equities have bottomed. With dirt-cheap valuations, increased buyback activities by Chinese tech giants, and favorable technical indicators, the market is showing signs of a recovery. Positive corporate earnings announcements and official efforts to invigorate China's ailing property sector have probably made the fund gain traction in Q2 (read: Time for China ETFs?).
WisdomTree India Earnings ETF (EPI - Free Report) ) – Up 12.1%
This is another country that soared in Q2 on election hopes. Market-friendly leader Narendra Modi was expected to continue ruling, which led to a surge in India’s equities in the early second quarter. Although the initial result of the election hit those stocks hard (as Modi’s popularity seemed to be waning), the formation of another coalition government led by Modi restored the market momentum by June-end.
The fund puts about 24% of its weight in Taiwan Semiconductor Manufacturing Company (“TSMC”). The stock has jumped 24.7% so far in the second quarter due to the ongoing AI boom. TSMC is crucial for the production of high-performance components necessary for AI applications. Investors should note that Taiwan's economy and markets are heavily influenced by its advanced technology sector, thanks to its significant contributions from the semiconductor industry (read: 4 Country ETFs to Benefit From AI Boom).
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5 Best Country ETFs of Q2
Wall Street has delivered a moderate performance in the second quarter of 2024, with the S&P 500 gaining 5.1%, the Dow Jones losing 0.4%, the Nasdaq advancing 8.6%, and the Russell 2000 retreating 2.3%, respectively (as of Jun 25, 2024). Key equity indexes have hit all-time highs in the quarter.
April became the worst month of 2024 for Wall Street due to rising rate worries, followed by a robust upswing in May and June. Wall Street’s performance clearly points to the broader market’s dependence on the “Magnificent Seven.” This bloc, which comprises NVIDIA, Microsoft, Apple, Amazon, Meta, Alphabet and Tesla, makes up about 30% of the S&P 500 and accounts for more than 40% of the Nasdaq-100.
The ongoing artificial intelligence (AI) craze, recent signs of cooling in inflation, and the resultant Fed rate cut bets, along with strong corporate profit growth, have been fueling investors' confidence in the stock market for the past two months.
What’s Brewing in Global Markets?
International economies have returned much lesser than the U.S. market. All-world ETF iShares MSCI ACWI ETF (ACWI - Free Report) , which has a significant share invested in U.S. equities, has added about 3.5% so far in the second quarter.
Vanguard FTSE All World ex US ETF (VEU - Free Report) is up 1.7% in the past three months. iShares MSCI Eurozone ETF (EZU - Free Report) has delivered a flat performance. iShares MSCI Japan ETF (EWJ - Free Report) is off 4.1%, while iShares MSCI Emerging Markets ETF (EEM - Free Report) has advanced 4.8%..
Against this backdrop, below, we highlight a few winning country ETFs of the second quarter.
ETFs in Focus
iShares MSCI Turkey ETF (TUR - Free Report) ) – Up 17.5%
Turkish stocks soared due to market-friendly measures installed by the government. The central bank of Turkey expects inflation to end the year at 38%, down from 75.45% recorded in May 2024. As a result, the central bank of Turkey left its key interest rate steady at as high as 50% in May. Meanwhile, president Erdogan won another term last year. Erdogan launched market-friendly policies and tried to mend its stern relationship with the West. Foreign investors responded to these developments positively.
iShares MSCI South Africa ETF (EZA - Free Report) ) – Up 16.7%
South African stocks jumped due to election hopes. While there were some upheavals at the start of June on early election results, the stock market gradually improved as political leaders agreed to a broad alliance to form the next government.
iShares China Large-Cap ETF (FXI - Free Report) ) – Up 13.2%
Chinese shares were under pressure last year due to the government’s anti-growth policies, and the real estate crisis. But it looks like Chinese equities have bottomed. With dirt-cheap valuations, increased buyback activities by Chinese tech giants, and favorable technical indicators, the market is showing signs of a recovery. Positive corporate earnings announcements and official efforts to invigorate China's ailing property sector have probably made the fund gain traction in Q2 (read: Time for China ETFs?).
WisdomTree India Earnings ETF (EPI - Free Report) ) – Up 12.1%
This is another country that soared in Q2 on election hopes. Market-friendly leader Narendra Modi was expected to continue ruling, which led to a surge in India’s equities in the early second quarter. Although the initial result of the election hit those stocks hard (as Modi’s popularity seemed to be waning), the formation of another coalition government led by Modi restored the market momentum by June-end.
Franklin FTSE Taiwan ETF (FLTW - Free Report) ) – Up 11.1%
The fund puts about 24% of its weight in Taiwan Semiconductor Manufacturing Company (“TSMC”). The stock has jumped 24.7% so far in the second quarter due to the ongoing AI boom. TSMC is crucial for the production of high-performance components necessary for AI applications. Investors should note that Taiwan's economy and markets are heavily influenced by its advanced technology sector, thanks to its significant contributions from the semiconductor industry (read: 4 Country ETFs to Benefit From AI Boom).