iShares MSCI Germany ETF & iShares MSCI Australia ETF are examples of international ETFs that Canadian investors can use to gain global diversification and exposure to leading firms in markets unavailable in Canada. That helps manage risk and improve long-term growth prospects. Since Canada’s market is heavily concentrated in financials, energy, and materials, international ETFs enable access to innovative sectors like technology and healthcare.
International ETFs also let Canadians participate in global economic growth trends and profit from regions or countries experiencing faster GDP increases, more dynamic corporate earnings, or currency advantages for Canadian investors.
Here are two funds that have both demonstrated clear year-over-year growth while offering solid yields.
ISHARES MSCI GERMANY ETF (New York symbol EWG; buy or sell through brokers) tracks the stocks in the MSCI Germany Index. Through its holdings, it aims to replicate 85% of the market capitalization of the German stock market. The remaining 15% is unavailable to foreign investors; that’s partly due to limitations on foreign ownership.
Regardless, this ETF offers investors exposure to Germany’s top stocks: SAP (software) at 15.2%; Siemens (engineering), 10.3% of assets; Allianz (insurance), 7.8%; Deutsche Telekom, 6.6%; Munich Reinsurance, 4.6%; Reinmetall AG (autos and arms), 4.6%; and Siemens Energy (energy technology), 3.9%.
The fund began trading in 1996. Investors pay a reasonable 0.50% MER.
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The German economy will likely remain sluggish for the rest of 2025—but should recover in 2026 with sharply increased government spending.
The country elected a new government in February 2025. New chancellor Friedrich Merz’s coalition government is now spending roughly $1 trillion U.S. on infrastructure and defence. All that has pushed the iShares MSCI Germany Fund to today’s new all-time highs.
iShares MSCI Australian equities rebound despite China pressures
ISHARES MSCI AUSTRALIA ETF (New York symbol EWA; buy or sell through brokers) exposes you to 48 of Australia’s major stocks.
The ETF’s top holdings are Commonwealth Bank of Australia at 14.4% of assets; BHP Group (mining), 10.3%: CSL Ltd. (biotechnology), 6.5%; National Australia Bank, 5.7%; Westpac Banking, 5.6%; Wesfarmers (conglomerate), 4.7%; ANZ Group Holdings (finance), 4.5%; and Macquarie Group (financial services), 3.9%.
By industry, the fund’s holdings break down as Financials, 39.7%; Mining, 18.3%; Health Care, 9.7%; Consumer Discretionary, 7.2%; Industrials, 5.8%; Real Estate, 5.6%; Energy, 3.7%; Consumer Staples, 3.2%; Information Technology, 2.7%; Telecoms, 2.3%; and Utilities, 1.6%.
The iShares MSCI Australia ETF started up March 12, 1996, and investors pay a reasonable 0.50% MER.
In the first quarter of 2025, the Australian economy expanded at one of the slowest rates since the pandemic, dampened by weaker public spending, private spending, fixed investment and exports. In particular, extreme weather events held back mining, shipping and tourism activity. However, growth accelerated in the second quarter, due to reduced weather-related disruptions.
The overall outlook for 2025 is positive, with the economy forecast to grow 1.8%. Consumer spending should recover, along with milder inflation, central bank interest rate cuts and a solid labour market.
Meantime, though, still-solid global demand for commodities will boost exports. That should help to offset risks such as the ongoing tension between the U.S. and China, as well as a shortage of skilled workers and rising labour.
Recommendation in Canadian Wealth Advisor: iShares MSCI Germany ETF & iShares MSCI Australia ETF are buys.
