The 2 Best (and 1 Worst) Single-Country ETFs to Buy from the World Cup’s Round of 16

Virtually all of the teams who made it through to this summer’s World Cup represent nations which also have a single-country ETF. 

So for the traders and investors who are also fans of the World Cup action, let’s take a look at the bracket, alongside the ETF price charts, to see who might win the ETF finals.

Let’s start with the countries that made it to the knockout round of 16: Canada, Brazil, Paraguay, Morocco, Norway, France, Mexico, England, Belgium, United States, Spain, Portugal, Switzerland, Egypt, Argentina, and Colombia. 

I found 11 of the 16 finalists had ETFs, including Morocco, which has a more-than-10% weighting within the VanEck Africa Index ETF (AFK), a pan-Africa fund.

Before I get to the charts, here are a few notes on these ETFs. You see, while the S&P 500 (SPY) and other U.S. indexes tend to span a wide range of sectors and industries, most country economies are more narrowly focused. In my experience, that tends to make them tactically attractive at times. 

For example, France’s equity index reflects a highly mature, heavy allocation to industrials and luxury goods that is increasingly vulnerable to a global consumer spending decline, as well as regional energy inputs. Conversely, North African and Middle Eastern frontier trackers get their upside potential from the long-term prospects for asset-backed growth, entirely decoupled from Western technology companies and their margin compression issues. 

Spain’s market architecture is heavily weighted toward banking conglomerates and defensive multinational utilities, providing a high dividend yield versus most other markets. Belgium, which defeated the U.S. earlier this week, acts as a proxy for specialized materials, chemical processing, and European consumer staples. 

Norway’s index is intensely concentrated in oil, natural gas, and marine harvesting, so it is highly correlated with physical supply shocks and global commodity scarcity. 

The United Kingdom’s iShares MSCI United Kingdom ETF (EWU) is selling at just 17x trailing earnings. But that could be a value trap, since it is dominated by legacy banks and defensive multinationals lacking organic growth drivers.

Switzerland represents a safe-haven quality factor, packed with globally diversified healthcare, consumer staples, and financial giants which operate with significant pricing power. 

That’s the pregame chatter. Now to the charts of note.

Best Charts in the Game 

Renewed rumblings in the Middle East are likely the savior for the iShares MSCI Norway ETF (ENOR), which has been a rut. It shows a “baby” percentage price oscillator (PPO) crossover to the upside, but from a very low level. Translation: this is just a hint, not a major transition to the bull side. But one to watch.

The iShares MSCI Brazil ETF (EWZ) is steadily building a base. Here, it is the pattern of the chart I like, as the moving averages are still in neutral. 

Worst Charts in the Game

Belgium may have won the battle on the pitch, but its price chart looks as if it is preparing for a battle with the bears. After a sharp up move, this lower-volatility country ETF looks increasingly vulnerable. 

The World Cup tournament is entering its home stretch. As the teams aim for global supremacy in the world’s most popular sport, let’s remember that the ETF markets allow us to choose our favorites in a different game: the one where we seek profits.

Rob Isbitts is a semi-retired CIO, former fiduciary investment advisor, and Barchart columnist. Check out his other work at ETFYourself.com (featuring the Fresh Charts weekly trading post), and ROAR.PiTrade.com, helping investors to better-manage their own portfolios.