FLTW

alphixir

That Korea/Taiwan split lines up with the semiconductor cycle underneath it - TSMC alone is now over 40% of the TAIEX, and Samsung plus SK Hynix together make up a record 42%+ of the KOSPI. So FLTW's and FLKR's YTD numbers are really a concentrated bet on three AI chip stocks riding the same memory upcycle, not broad country diversification.

OkChange9119

xD I haven't sold yet but comparing the likes of FLCH vs FLTW, I definitely wish I picked FLTW instead

lfisch4

If outperforming US indexes is your metric, why not just go with Korea or Taiwan? FLKR has been great for me. Been eyeing FLTW as well but haven’t jumped in yet

Stephen_1984

Country | Ticker | Fund Name | Net Expense Ratio 🇪🇺 | VGK | Vanguard FTSE Europe Index Fund ETF Shares | 0.08% 🇪🇺 | IEUR | iShares Core MSCI Europe ETF | 0.09% 🇨🇳 | CXSE | WisdomTree China ex-State-Owned Enterprises Fund | 0.32% 🇨🇳 | KALL | KraneShares MSCI All China Index ETF | 0.48% 🇹🇼 | FLTW | Franklin FTSE Taiwan ETF | 0.19%

programmingguy

Good morning. Just woke up...taking a dump. My view on global & EM index funds from another post I shared earlier. ..: 1. The US is one country. Foreign developed and emerging countries represented in an index are not one big monolithic group. They are a large number of countries with diverse social-economic foundations, diverse political climates, diverse cultures, governance issues and geopolitical challenges. 2. Much of the hype for EM were due to returns owing to them starting at really low points by moving away from protectionist centralized economies to privatization and foreign investment in the 90s and early 2000s. Yet they couldn't completely unshackle themselves from protectionist and centralized control tendencies the last couple of years. You've seen governments moving back to imposing greater control, regulation. 3. While GDP has grown, this has not been reflected in the stock market. This is because earnings growth hasn't matched GDP growth. 4. Earnings growth in publicly traded companies hasn't matched GDP growth because the largest companies in these indexes have been plagued with governance issues - for Eg, Brazil was hyped as one of the BRIC champs. Brazil's Petrobas which was a big chunk of the Brazil index in the 2010s was plagued with heavy corruption during a time when oil prices were coming down. So much corrption and meddling by the government. EM index funds are 40% to 45% China with 5% Taiwan. So essentially if you buy an EM index fund, you are buying China. China has been cracking down on their megacaps to prevent monopolies chopping their market caps into half and some by even 90% (Didi), excess influence by foreign investors and any dissent against the CCP. India had descent GDP growth for the last couple of years however this was not reflected in earnings growth by publicly traded companies on their stock exchange. Russia - I don't need to explain Russia. Yet everyone fell for the BRIC hype in the 2010s because the EM hype was waning down. South Korea has some of the largest multinationals like Samsung and Hyundai yet their stock market has been plagued too. 5. Much of the GDP growth in these economies are not captured in publicly traded companies that are listed on the stock market. They are also captured by a lot of private companies which are family owned for generations with no intention of making public offers. 6. The US stock markets are very efficient. The stock markets in many of these EM countries are very inefficient due to governance issues. 7. While a hot topic of debate, the US leans towards a capitalistic economy with favorable policies for companies to grow. Most of the major global tech leaders that everyone talks about are products of the US. Sure, you will have a Shopify or a Spotify here and there but those are rare. While there are successful start ups in Sweden, Spotify was threatening to leave Sweden due to unfriendly government rules to make it difficult to issue stock options so they decided to directly list in the US through the NYSE. 8. I would rather be a stock picker or if that's not possible, a specific country picker through an ETF after reviewing the holdings of the ETF. 9. My tolerance for risk doesn't need clumsy diversification. I want to see big improvements in governance leading to outperformance for a few years to make up for the outperformance from the US before changing my tune on internationals and EM. 10. I've owned some ETFs occasionally for short periods of time (1 to 2 year) through low cost ETFs provided by Franklin Templeton - FLIN (India), FLTW (Taiwan), FLSW (Switzerland), FLAU (Australia). I owned actively managed funds that had access to India based companies directly from the early 2000s to 2016 before cashing earning some ~15% annualized on average. I don't do that anymore. Over the last two years and the decade preceding that, the US and US specific companies have been easy money. There's a correction going on and this will be a good opportunity to load up once again. The US is the cleanest shirt in the laundry basket. I'll need to see big improvements in governance and economic policy front in the internationals/EM space.

programmingguy

The rational provided is diversification. Okay, fine. My tolerance for risk doesn't need clumsy diversification. I grew up in a third world hell hole that's today hailed as one of the big EMs that can possibily overtake the US but having seen facts on the ground, I realize how much hype is marketed out there. The money manager folks talk as if the rest of the world is divided into developed and emerging economies and a simple view considers them as two big monolithic blocks that follow similar capitalistic tendencies like the US. We are told that PEs are Sooooo cheap compared to the US. They are cheap for good reason. Well deserved. Reasons why I will avoid foreign index funds: The US is one country. Foreign developed and emerging countries represented in an index are not one big monolithic group. They are a large number of countries with diverse social-economic foundations, diverse political climates, diverse cultures, governance issues and geopolitical challenges. Much of the hype for EM were due to returns owing to them starting at really low points by moving away from protectionist centralized economies to privatization and foreign investment in the 90s and early 2000s. Yet they couldn't completely unshackle themselves from protectionist and centralized control tendencies the last couple of years. You've seen governments moving back to imposing greater control, regulation. While GDP has grown, this has not been reflected in the stock market. This is because earnings growth hasn't matched GDP growth. Earnings growth in publicly traded companies hasn't matched GDP growth because the largest companies in these indexes have been plagued with governance issues - for Eg, Brazil was hyped as one of the BRIC champs. Brazil's Petrobas which was a big chunk of the Brazil index in the 2010s was plagued with heavy corruption during a time when oil prices were coming down. So much corrption and meddling by the government. EM index funds are 40% to 45% China with 5% Taiwan. So essentially if you buy an EM index fund, you are buying China. China has been cracking down on their megacaps to prevent monopolies chopping their market caps into half and some by even 90% (Didi), excess influence by foreign investors and any dissent against the CCP. India had descent GDP growth for the last couple of years however this was not reflected in earnings growth by publicly traded companies on their stock exchange. Russia - I don't need to explain Russia. Yet everyone fell for the BRIC hype in the 2010s because the EM hype was waning down. South Korea has some of the largest multinationals like Samsung and Hyundai yet their stock market has been plagued too. Much of the GDP growth in these economies are not captured in publicly traded companies that are listed on the stock market. They are also captured by a lot of private companies which are family owned for generations with no intention of making public offers. The US stock markets are very efficient. The stock markets in many of these EM countries are very inefficient due to governance issues. While a hot topic of debate, the US leans towards a capitalistic economy with favorable policies for companies to grow. Most of the major global tech leaders that everyone talks about are products of the US. Sure, you will have a Shopify or a Spotify here and there but those are rare. While there are successful start ups in Sweden, Spotify was threatening to leave Sweden due to unfriendly government rules to make it difficult to issue stock options so they decided to directly list in the US through the NYSE. I would rather be a stock picker or if that's not possible, a specific country picker through an ETF after reviewing the holdings of the ETF. I want to see big improvements in governance leading to outperformance for a few years to make up for the outperformance from the US before changing my tune on internationals and EM. I've owned some ETFs occasionally for short periods of time (1 to 2 year) through low cost ETFs provided by Franklin Templeton - FLIN (India), FLTW (Taiwan), FLSW (Switzerland), FLAU (Australia). I owned actively managed funds that had access to India based companies directly from the early 2000s to 2016 before cashing earning some ~15% annualized on average. I don't do that anymore.