Global growth is certainly edgy at this moment with the main culprits being the Chinese economic slowdown, commodity market rout and its adverse impact on emerging markets and obviously the relentless tension in the energy sector. The World Bank and the International Monetary Fund (IMF) also lowered their outlook on global growth.

The World Bank expects the global economy to grow 2.9% in 2016, down from the forecast of 3.3% it made in June while IMF projected world economic growth at 3.4% in 2016 and 3.6% in 2017, down 0.2 percentage point for each year from the estimates given last October.

IMF slashed global growth forecasts thrice in less than a year. The agency even curtailed the growth rate of the lone star in the developed economies pack – the U.S. – to 2.6% for both 2016 and 2017, down 0.2 percentage point for each of the years from the October projection.
Consumer demand remained soft in the developed economies of U.S. and Japan while commodity market worries led to doubts over the sustainability of emerging markets. IMF, if the world economy grows below 2.5% despite a growing population, it means that global recession is on the horizon.

Still there are a few global ETFs which might outperform their peers despite the broad-based gloom. Bulls can ride these ETFs as most of the developed economies are thriving on easy money and thus act as lucrative investment propositions. Even at home, the energetic discussion over four-Fed-hikes-in-2016 has taken a back seat after the soft Q4 GDP report.

There is a high chance that the Fed will not hike rates more than once this year given the upheaval in the global market. Plus, the possibility of a rate hike in March is increasingly on the low side (read: ETF Winners & Losers Post Fed Meet).

Though cheap money inflows fuel the case for risky investing, investors need to be selective while playing this field, given the heightened uncertainty.

How to Pick Right ETFs?

First, fundamentals need to be favorable, and then investors can look at our Zacks ETF Rank. This ranking system seeks to find the best funds in a given market segment based on a number fundamental and technical factors about them plus the Zacks forecast for the underlying industry or asset class (see: Our Zacks ETF Rank Guide).

Following this technique, we at Zacks revised our ETF ranks recently and found out that four global ETFs have been upgraded from #3 (Hold) #2 (Buy). These ETFs are widely spread out across each sector and security. These funds seek to offer solid exposure to global equity markets while at the same time eliminate company-specific risks. This is especially true given that these products hold a great deal of stocks and do not allocate a big chunk of assets to any particular security (see: all the World ETFs here):

iShares MSCI ACWI ETF (ACWI)