July's Top-Performing Country ETFs: This Nation Led Global Equity Rally, And It Wasn't China

July was a positive month for the U.S. stock market, but strong gains were also seen in global equity markets, with some countries posting double-digit monthly returns. Notably, the 1% decline in the dollar in July, marking its second consecutive month of losses, provided a boost to numerous emerging markets heavily reliant on the greenback’s cycle. Additionally, the diminishing fears of a global recession contributed to a favorable market sentiment, rekindling the market’s appetite for global equities.

However, some country-specific factors, such as changes in economic policies, played a crucial role in the variations of performance among country exchange traded funds (ETFs) in July.

The SPDR S&P 500 ETF Trust SPY has consistently outperformed the iShares MSCI All Country World Index Ex-US ETF ACWX in 2023, boasting returns of 18.7% compared to 11.7%. Nonetheless, in July, U.S. stocks slightly underperformed global equities (2.8% vs. 3.4%).

Which nations stood out in July with impressive performance in their stock markets? Let’s take a look at data from Koyfin to find out!

Country ETFs: Top Gainers in July

1. Poland – iShares MSCI Poland ETF EPOL

• Developments in Poland: The Polish zloty (PLN) reclaimed its mid-February 2022 value, effectively erasing all Ukraine conflict-related losses. Poland’s stock market reaches an 18-month high, indicating robust investor sentiment, inflation eased further and the country’s unemployment rate fell to the lowest since October 2019.
• Performance month to date: 9.4%
• ETF monthly flows: $25.8 million
• Performance year to date: 33.6%

1. China – SPDR S&P China ETF GXC

• Developments in China: Chinese authorities committed to bolster the economy through increased policy support, including measures to lower mortgage rates to prop up the sluggish domestic real estate sector.
• Performance month to date: 10%
• ETF monthly flows: ($134 million)
• Performance year to date: 22.1%

1. South Africa – iShares MSCI South Africa ETF EZA

• Developments in South Africa: Amid the rising momentum of commodities in July, the stock market of commodity-rich South Africa reaped significant gains, and the South African rand also enjoyed a positive upswing.
• Performance month to date: 11.7%
• ETF monthly flows: ($8.1 million)
• Performance year to date: 2%

1. Vietnam – VanEck Vietnam ETF VNM

• Developments in Vietnam: Vietnam continued to attract foreign direct investment, which totaled $11.58 billion in the first seven months of 2023. The country’s tourist sector rebounded strongly from pandemic-related restrictions, with international tourists growing 194.6% year-on-year to 1.04 million in July 2023.
• Performance month to date: 13.07%
• ETF monthly flows: $14.7 million
• Performance year to date: 0.8%

1. Turkey – iShares MSCI Turkey TUR

• Developments in Turkey: After President Recep Tayyip Erdogan‘s victory in the June elections, the newly announced economic team has initiated a significant shift in the country’s economic policy. The Central Bank of Turkey raised interest rates by 900 basis points in the last two meetings, signaling a bold reversal from its previous ultra-loose and unorthodox approach.
• Performance month to date: 17%
• ETF monthly flows: ($23.3 million)
• Performance year to date: -10.3%

Read now: Rising Stars, Falling Trends: July’s Industry ETF Winners and Losers

Chart: Best Performing Country ETFs In July

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