Global developed markets are up
The coronavirus pandemic has been a drag on business activity in almost every country, and foreign stocks have not been spared the pain. The Vanguard FTSE Developed Markets ETF (NYSEMKT: VEA) tracks an index of approximately 4,000 companies of all sizes in international markets. Nearly a quarter of its allocation is to Japanese equities, and it has significant exposure to the U.K., Canada, Switzerland, France, and Germany.
Stock markets in other developed nations have largely lagged the U.S. market through most of this year, but they’ve outpaced the S&P in December. The fund has returned 2.45%, nearly doubling the growth of U.S. stocks in the month. Investors in this ETF will appreciate its extremely low 0.05% expense ratio, its 2.07% distribution yield, its low bid-ask spread, and its great liquidity with $350 million of average daily trading volume.
The NASDAQ is heating up again
Tech stocks, which make up nearly 65% of the NASDAQ 100 Index, led the bull market through most of 2020. However, ongoing economic uncertainty and investors’ concerns about lofty valuations sparked a modest sell-off in September, and the broader market outpaced the Nasdaq for about three months as defensive sectors like utilities gained traction.
