Did you hear? Traders in Cairo watched their local stock market gain +1,588% over the past five years (for the period ended June 11). The story was similar in the Ukraine, where stocks gained +1,572%, and in Peru, which inked a +1,031% advance.

     Not many people, even financial experts, know about those eye-popping results, so you shouldn't feel bad if you missed these incredible returns.

     But the odds are you'll miss the boat completely on gains like that if you keep investing the way you always have.  And then you might feel like kicking yourself, because capturing these impressive triple- and even quadruple-digit gains is surprisingly easy to do.

     Now, not long ago, that wasn't true.  Most investors simply couldn't participate in faraway markets like Egypt, Peru and the Ukraine.  But today, no American has to miss the international investment party: The far side of the world is as close as your computer.  It's simple -- and astonishingly inexpensive -- to invest in international markets.  You can even use the same brokerage account you have now.

     Consider these three opportunities:

Mexican bonds with a 10% coupon. These sovereign bonds are investment grade, according to Moody's and Standard & Poor's, both of which give the country a "stable" outlook.  To sweeten the pot even more, the peso has gained +8.8% against the dollar so far this year, which magnifies returns for U.S. investors. A bond investors paid 10,000 pesos for on Jan. 1 cost $917.90, but it's going to yield nearly 11%, as the 1,000 pesos in interest are now worth $99.86 instead of $91.79.  A 10% coupon is nice enough, but an 11% actual yield is even nicer.

 

The Yellow Pages Income Fund, a limited-purpose trust in Canada. It's paying a rich 12.4% dividend yield.  You like that the trust, which owns the phone book, has increased its total revenue by +155.0% since 2004, but you love that its net income has burgeoned by +397.2% in the same time.  The higher a trust's net, the higher it's payout, period. It must pass the money to its owners.

 

Trygvesta, an insurer that operates in Denmark, Norway and Finland. Shares in the company, which trade in Copenhagen, were first offered in October 2005.  They've since gained +111.8%, turning a $10,000 investment into $21,180. That's not bad, but check out the icing on the cake: The Danish krone, in which dividends are paid, has risen +40% against the dollar.  That means long-term U.S. holders are earning a 10% dividend yield in dollars -- far greater then the current 4.8% yield that's being paid today to investors who buy in krones.  Finally, a way to make the weak dollar work for you, not against you!

     How to Buy Assets Most Americans Can't Get Their Hands On
    
     There's a lot to like about all of these investments.  They're on the conservative side, they're stable, they offer a nice yield.  They protect your assets from a declining domestic market, and they each take advantage of the weak U.S. dollar.

     But there's one problem ...

     You can't buy these investments in the United States.

     Now, that doesn't mean it's impossible to invest in these assets. But doing so presents a few challenges.  For one, you'll need a brokerage that can execute trades in Mexico City, Toronto and Copenhagen.  Discount brokers don't, and even most full-service brokerages aren't set up to handle these trades.  You'll also need a substantial block of capital and you'll need to be willing to shoulder high commissions and extra fees.  And it would be a good idea to be conversant with the tax policies of these three countries so as to judge each investment's net performance.

     All of that can be done, of course.  But it adds a few steps.

     Surely someone has remedied this, right?  Isn't there an easier way to put your money to work in international markets?

     Absolutely. 

     And the best part is that the "easier" way is also the better way.  The three investments I mentioned all can be made without opening a new brokerage account ... without allocating tens or hundreds of thousands of dollars ... and without finding a broker or a tax adviser to wade through all of the rules and red tape.

     If you want to gain instant exposure to these three foreign securities, then you only need to know three letters -- ETF.

     Each of those investments, and a few dozen others that are just as compelling, can be made by purchasing shares in Evergreen International Balanced Income Fund, an exchange-traded fund that trades under the ticker EBI.  Your money will be put to work all over the world, in scores of fixed-income and equity investments, and you'll receive a check -- not just each quarter but every month -- that represents a 10.1% annual divided yield.  And here's the kicker: You can do all this from the same brokerage account you normally use.

     International ETFs Truly Offer a World of Choices

     Investors can choose from more than 500 internationally focused ETFs that offer access to foreign securities you can't otherwise buy on U.S. exchanges.  These investments are your passport to markets across Europe, South America and in countries like India and China.

     I mentioned the standout returns in Peru, Ukraine and Egypt.  Take a look at Brazil: For the five years ended June 1, the market there was up +781%. EWZ, a fund that tracks the Brazilian market, rose even higher than that. It notched gains of +921%. Hold onto your hat: Your dollars in U.S. markets earned only 1/20th as much during that time!

     Now, not only can you put your money to work in scores of other countries, you also can choose precisely which foreign sectors you want to invest in: The SPDR series of ETFs just launched 10 ETFs that cover areas like health care, telecom and consumer staples. 

     One of the great benefits of ETFs is their low costs. Management fees, on average, are a paltry 0.32%. That means you're only paying 32 cents for every $100 you invest -- you have more than that in the cup holder of your car! 

     ETFs offer international securities far, far more cheaply than if you invested in those countries directly.  EBI's fee is a modest 1.2%, but it's providing a crazy amount of value by offering not only strong growth but also a rich dividend stream -- that's the best of both worlds.

     Smart Investors Have Always Invested Abroad

     The U.S. economy, though huge, accounts for only 24% of the world's financial picture.  That means most business takes place outside of the United States. It turns out that putting your money to work overseas has always been a direct path to gains.

     This is especially true with ETFs.  Of the 20 top-performing funds with five-year histories, 15 were internationally focused.  Of the top 50 ETFs, 39 of them -- more than three-quarters -- invested outside the U.S. borders. 

     If you'd like to learn the names of my favorite ETFs, plus receive a steady stream of inside information on this little-known but overwhelmingly large corner of the investing world, then you might want to check out my premium investing service -- The ETF Authority.  It's the only newsletter of its kind devoted to helping readers like you capture the best returns and highest yields the world has to offer.  In my current issue, I profile an ETF boasting a 15.2% dividend yield.  After trading at a steep double-digit premium as recently as three months ago, this fund can now be picked up near its net asset value.  

Good investing!

Nathan Slaughter
Special Guest Contributor, Global Dividend Opportunities
Chief Investment Strategist, The ETF Authority
StreetAuthority.com
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