Some exchange traded funds focused on international markets
have been sturdy performers as of late.
To the surprise of some investors, among this week's global
ETF leaders are plenty of emerging markets ETFs, including
downtrodden Brazil and India fare.
Some EM ETFs Were Pretty Good In August
The resurgence for international ETFs comes as investors were
not shy about pulling money from exchange traded products last
month. August was the worst month for ETF outflows
since early 2010
. However, the outflows data reveal an important point: That the
bulk of the outflows, $13.8 billion to be precise, were
attributable to the SPDR S&P 500 (NYSE:
Said differently, investors pulled money from U.S. stocks.
Some Europe ETFs actually saw inflows and while many emerging
markets ETFs are struggling on the flows front, performance for
some is starting to pick up. Those points could be signs the
following are worth considering over the coming weeks.
EGShares Emerging Markets Consumer ETF (NYSE:
) While investors have been pulling cash from all types of
emerging markets ETFs this year, EGShares says it
has raked in more than $400 million
in new investments this year. ECON, the firm's largest ETF, is a
big reason why.
Year-to-date, outflows from emerging markets funds are
flirting with the $12 billion market, but inflows to ECON are
flirting with $370 million. That could be a sign investors are
still willing to bet
on the growth of the emerging markets
Brazil and India ETFs have been pleasant surprises this week
and investors that want to participate in that upside without the
commitment of a single-country fund should consider ECON because
the fund devotes over 27 percent of its combined weight to those
AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (NYSE:
) The AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF is
actively managed fund with a highly concentrated lineup of just
over 30 holdings mixed between developed and developing markets.
Unheralded AADR has returned over seven percent year-to-date, but
that does not tell the entire story. AADR can serve as a
portfolio complement to funds benchmarked to the MSCI EAFE Index,
which AADR has
outpaced over the past three years
Important to AADR's success is what the ETF does not include
in its lineup. The ETF "generally passes on businesses in
leveraged, slower-growing sectors such as energy, basic
materials, utilities or financials, which dominate the
international indices. Instead, the focus is on traditional
growth sectors like technology, consumer discretionary / staples
according to AdvisorShares
No single holding can represent more than 10 percent of AADR's
weight and sector exposure is capped at 45 percent while the fund
limits total emerging markets exposure to 35 percent. Most of the
fund's current developing world exposure goes to low beta Taiwan
and Chinese technology names, which have
been stellar performers this year
For more on ETFs, click .
Disclosure: Author does not own any of the securities
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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