China has been in the spotlight amid MSCI's decision Tuesday to add mainland A-shares to its benchmark emerging-market index.
But a couple of other foreign equity funds have been setting up potential buy opportunities in the meantime.
Columbia Emerging Markets Consumer ( ECON ) has pulled back after getting close to a 52-week high last week. A 6% gain from a 25.64 cup-with-handle buy point has been trimmed by half. But it's been finding support at its 50-day moving average, which could provide a chance to add shares on a solid bounce off the line.
The $838.7 million fund, launched in September 2010, tracks the Dow Jones Emerging Markets Consumer Titans 30 Index. Its biggest geographic weighting as of June 20 was Asia at 47% of assets. Latin America was next at nearly 27% and Africa/Middle East third at 18%, according to Morningstar Inc.
Consumer cyclical, consumer defensive and technology stocks accounted for 46%, 36% and 18%, respectively, in each of those sectors. About half of ECON's top holdings were companies with American depositary receipts trading in the U.S., such as Brazil-based Ambev ( ABEV ), China's JD.com ( JD ) and Ctrip.com ( CTRP ), and India's Tata Motors ( TTM ).
[ibdchart symbol="ECON" type="daily" size="threequarter" position="leftchart" /]
ECON has outperformed the MSCI ACWI Ex USA index year-to-date 18.1% to 13.9%, but lags the benchmark index for three-year and five-year average annual returns. Its expense ratio is 0.85%.
Moving on to the developed market, iShares MSCI Italy Capped (EWI) gapped down and fell 3% Tuesday. But it found support at its 50-day line and bounced off the support level Wednesday, setting up a chance to add shares. EWI is up 10% from a flat-base breakout in April. It's gained 33% in the past seven months, but is still 25% off a June 2014 high and 62% below its May 2007 peak.
[ibdchart symbol="EWI" type="daily" size="threequarter" position="leftchart" /]
Launched in March 2016, the fund, which tracks the MSCI Italy 25/50 Index, has attracted $581.6 million. Top sectors as of June 19 included financial services accounting for 33% of assets, utilities at 20%, and about 12% each in consumer cyclicals, industrials and energy. EWI's portfolio contained several ADRs such as Ferrari (RACE), Telecom Italia (TIA) and Tenaris (TS).
EWI has slightly outpaced MSCI ACWI Ex USA for the year to date and underperformed over the three- and 10-year periods. It carries an expense ratio of 0.48%.
Tuesday's ETF picks are less than 2% below their respective flat-base buy points. Schwab U.S. Large Cap Value (SCHV) shows a 51.06 entry; iShares Core High Dividend's (HDV) buy point is 85.80.
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