Fidelity ETF expert Étienne Joncas-Bouchard discusses international equity ETFs and the opportunities and importance of investing overseas in today’s environment. The ETF industry has seen close to $35 billion in net inflows year-to-date, notes ETF strategist Étienne Joncas-Bouchard. Equity ETFs are leading the way, and there has also been an emerging theme favouring stocks with high ESG ratings. Étienne believes investors are looking at ETFs as a rebalancing tool, and while last year the focus was on low-volatility mandates, this year investors are looking at factors such as value and quality. International flows have been another emerging trend, in what is generally a much cheaper market. Since March, there has been a higher divergence between sectors, regions, etc., and EAFE markets are trading at a wide discount compared with the U.S. and Canada. Because the EAFE covers more than 20 countries, some are up more than others. This is why having a barbell approach can be key.
Recorded on December 8, 2020.