Foreign Funds and Geopolitical Shocks: Single-Country ETF Performance Analysis

The Seeking Alpha “Chart of the Day” report published on January 9, 2026, presents a compelling case study in market resilience amid geopolitical uncertainty [1]. The analysis tracks single-country ETFs across four distinct geographic regions—Denmark, Colombia, Mexico, and Argentina—revealing that all four international markets outperformed the US benchmark during the one-month period ending early January 2026. This performance pattern defies conventional expectations, as two of these markets sit at the center of major geopolitical controversies that would typically trigger significant capital outflows.

The Danish market’s leadership position is particularly noteworthy given the extraordinary diplomatic tensions surrounding US interest in acquiring Greenland, which is an autonomous territory within the Kingdom of Denmark. The White House has explicitly considered acquiring Greenland—including through military force if necessary—drawing comparisons to the 2019 administration interest and prompting Danish Prime Minister Mette Frederiksen to warn that any US attack on Greenland would “bring about the end” of the NATO alliance [2][3]. European analysts at Bruegel have characterized this development as “the worst crisis of NATO’s existence,” suggesting the stakes extend far beyond territorial acquisition [4].

Simultaneously, the Venezuelan situation adds another layer of geopolitical complexity. On January 3, 2026, US forces conducted “Operation Resolve,” resulting in the capture of Venezuelan President Nicolás Maduro and his wife in Caracas [5]. This unprecedented military operation marks a dramatic assertion of US hemispheric hegemony with significant implications for international law and regional stability. State Street Global Advisors notes that despite these developments, “little discernible market movement” has occurred in regional markets [8].

Denmark’s equity market performance presents a fascinating paradox. While headlines suggest potential NATO fracture and transatlantic tensions, the Copenhagen Index gained approximately 11.6% over the past month, with the iShares MSCI Denmark ETF (EDEN) leading all monitored markets with a +7.7% one-month return [1][7]. Several factors may explain this counterintuitive performance.

First, markets may be discounting political rhetoric as unlikely to materialize. Analysis from Breaking Defense suggests US military action against Greenland remains “unlikely,” potentially reassuring investors that diplomatic tensions will remain verbal rather than operational [2]. Second, investors might anticipate potential economic benefits from increased US-Denmark engagement, viewing the situation as an opportunity rather than a threat. Third, technical factors including short covering and portfolio rebalancing at month-end may have contributed to the performance surge.

However, the longer-term trajectory reveals ongoing challenges. EDEN has declined 8.29% over the 16-month period, with the Copenhagen Index remaining 17.5% below year-ago levels [7]. This suggests the recent rally may represent recovery momentum following a 4-year low rather than fundamental repricing of positive developments.

Colombia’s performance stands out as the most remarkable among monitored markets. The Global X MSCI Colombia ETF (COLO) has generated a 53.71% return over the 16-month period, significantly outpacing all peers including the US benchmark [0]. State Street Global Advisors identifies Colombia as potentially “the biggest winner” from regional geopolitical shifts, particularly given its position as South America’s second-largest oil producer and proximity to Venezuela [8].

The combination of commodity price dynamics, infrastructure investment flows, and strategic positioning in nearshoring supply chains appears to be driving sustained foreign investment. However, the magnitude of returns suggests potential overextension, with the 52-week range indicating significant volatility that investors should carefully consider.

Both Mexico and Argentina have demonstrated resilience despite facing their own policy uncertainties. Mexico’s EWW ETF posted +3.7% monthly returns and +31.64% over 16 months, benefiting from nearshoring trends and USMCA regional integration [0]. Argentina’s modest +1% gain occurs against the backdrop of President Javier Milei’s market-friendly reforms, though economic volatility continues to dampen investor enthusiasm.

The international ETFs exhibit significantly thinner trading liquidity compared to SPY. EDEN averages approximately 9,343 shares daily versus SPY’s 66 million shares, creating execution risk for larger positions [0]. This liquidity disparity amplifies both upside potential and downside risk during periods of market stress.

The most significant risk involves potential escalation of geopolitical tensions into actual military confrontation. European analysts warn that any US military action toward Greenland would likely be “fatal to NATO” and trigger severe market disruptions across European and NATO-aligned assets [2][4]. The disconnect between geopolitical headlines and market performance may not persist; historical patterns suggest that actual military conflicts or severe diplomatic ruptures typically lead to significant risk asset sell-offs.

The Venezuela operation establishes a precedent for hemispheric interventions that creates ongoing uncertainty for Latin American markets [5][6]. While current market calm suggests acceptance of US actions, the underlying structural risks remain elevated.

Currency risk represents another consideration for dollar-based investors. All four international ETFs carry foreign currency exposure that could amplify losses in risk-off scenarios, particularly given the potential for safe-haven flows into the US dollar during periods of geopolitical stress.

The current market resilience presents potential opportunities for investors with higher risk tolerance and longer time horizons. Denmark’s reasonable valuations—P/E ratio of 15.83 and P/B ratio of 2.67—suggest the market is not pricing in extreme scenarios [9]. Colombia’s exceptional commodity positioning and infrastructure investment trajectory may continue to attract foreign capital flows.

The analysis reveals several risk factors that warrant attention. The technical indicators [0] show warning signals that historically correlate with elevated volatility during geopolitical uncertainty. Users should be aware that the thin trading volume in single-country ETFs like EDEN and COLO could amplify price movements during periods of stress, potentially making exit more difficult and costly during market downturns.

The data reveals a striking pattern of international market outperformance relative to US equities during a period of elevated geopolitical tensions. Denmark’s unexpected leadership despite NATO tensions suggests markets are differentiating between political rhetoric and operational reality. Colombia’s exceptional 16-month return of 53.71% reflects fundamental economic drivers including commodity prices and infrastructure investment, though the magnitude of gains warrants caution regarding potential overextension.

The one-month performance data indicates bullish momentum across all monitored international ETFs, with all four trading above their 20-day, 50-day, and 200-day moving averages [0]. Denmark’s equity beta of 0.57 suggests lower systematic risk than global markets, potentially explaining its resilience [9].

Monitoring priorities include US-Denmark diplomatic developments regarding Greenland, Colombia’s fiscal policy trajectory, Mexico’s relationship with the new US administration amid tariff threats, Venezuela’s post-Maduro transition, and currency fluctuations across the Danish Krone, Colombian Peso, and Mexican Peso versus the US dollar.