The stars don’t always spell success, as this foreign fund—our first idea today—demonstrates. Our second recommendation is a sale of a biotech with disappointing quarterly results.
iShares MSCI Canada ETF (EWC)
From The Complete Investor
In picking a mutual fund within a particular category, two starting points are their fees and Morningstar’s ratings. But sometimes these guideposts are misleading, and a fund with higher fees or fewer stars might actually be the better choice.
FundFolio, for example, recommends three ETFs in our “Best Countries” section, representing Canada, Australia, and China. Our Canadian pick, iShares MSCI Canada ETF (EWC), ranks in the 42nd percentile of its “miscellaneous region” category and has returned 6.2% so far this year and more than 38.5% for the 12-month period ended February 14.
This compares to 3.5% year-to-date and 31.8% 12-month returns for Vanguard’s four-year-old FTSE Canada All Cap (VCN), which ranks in the 55th percentile for its category. But Morningstar gives the FTSE fund three stars while failing to rate the iShares fund at all. Go figure.
We rate the fund ‘buy’.
Stephen Leeb, PhD. And Genia Turanova, The Complete Investor, www.completeinvestor.com, 866-833-2070, March 2017