Top 7 Best and Popular Diversified Emerging Markets Stock ETF Fund 2011

Emerging Markets Stock ETF logo
Emerging Markets Stock ETF logo

Intro

There are three different ways to invest in diversified emerging markets stock funds such as through mutual fund, exchange traded fund (ETF) and closed end fund (CEF). In this article it is all about Top 7 Popular Diversified Emerging Market Stock ETFs. Emerging market stock has been very popular in recent years. Emerging market definition usually includes most developing countries in Asia, Latin America, Africa and Eastern Europe. Some of these countries are known as BRIC acronym (Brazil, Russia, India and China) and recently some articles even suggest changing it to BIIC (Brazil, Indonesia, India and China). Investing in individual stock in these countries may be very volatile; therefore investing in a bucket list of companies listed in ETF funds should become a better option for long term investors or traders.


ETF Criteria

What I like about ETF is its liquidity and tax efficient features compare to mutual fund. Any investors or traders can trade ETF during market hours. Most of ETF is also passively managed and tracks its index benchmark. My Top 7 Popular Diversified Emerging Market Stock ETF list mainly consists of 2 or more star of Morningstar rating and big asset underlying the ETF. As we know, big underlying asset means investor as well constitutional is confident in investing on these ETFs. With 2 or more stars rating, this means the ETF should perform just fine in any market conditions whether it is during up or down market. Please note: The top 2 of this ETF is bigger than the other funds. Some ETFs may not have any rating presently since it is a new ETF.

  1. iShares MSCI Emerging Markets Index
  2. Vanguard Emerging Markets Stock ETF
  3. SPDR S&P Emerging Markets Small Cap
  4. iShares MSCI BRIC Index
  5. Guggenheim BRIC
  6. WisdomTree Emerging Markets Equity Inc
  7. WisdomTree Emerging Mkts SmallCap Div

If you are interested in emerging market mutual fund, please check:


ETF Information

(click column header to sort results)
No  
Fund Description  
Ticker  
Total Asset (Bil)  
Expense Ratio  
M* Rating  
Yield  
1
Vanguard Emerging Markets Stock ETF
VWO
52.62
0.27%
4
1.20%
2
iShares MSCI Emerging Markets Index
EEM
45.09
0.72%
4
1.33%
3
SPDR S&P Emerging Markets Small Cap
EWX
1.24
0.66%
NR
0.34%
4
iShares MSCI BRIC Index
BKF
1.19
0.72%
2
1.36%
5
Guggenheim BRIC
EEB
1.09
0.60%
3
1.16%
6
WisdomTree Emerging Markets Equity Inc
DEM
1.03
0.63%
5
3.14%
7
WisdomTree Emerging Mkts SmallCap Div
DGS
0.81
0.63%
5
2.78%
8
BLDRS Emerging Markets 50 ADR Index
ADRE
0.77
0.30%
4
1.78%
9
PowerShares FTSE RAFI Emerging Markets
PXH
0.53
0.85%
4
0.64%
10
SPDR S&P BRIC 40
BIK
0.5
0.50%
3
1.41%
Vanguard EM Top 25 holdings
Vanguard EM Top 25 holdings

1. Vanguard Emerging Markets Stock ETF - VWO

Known with its index mutual fund, Vanguard has become the market leader in ETF asset holding. It is recently surpassing ishares as the largest ETF providers. Vanguard Emerging Markets Stock ETF is also a titan ETF with 52.67 Billion net asset. Vanguard Emerging Markets Stock ETF objective is to track the performance of the MSCI Emerging Markets index, its index benchmark. The fund utilizes a passively managed investment approach by investing most of assets in a representative sample of the common stocks included in the MSCI Emerging Markets index. This index has approximately 748 common stocks of companies located in emerging markets around the world. The total expense ratio is 0.27% per year which is one of lowest expense ratio for emerging market ETFs. The ETF currently has about 831 stock holdings.

The primary portfolio consists of large cap blend international emerging market stocks. Top 10 largest equity holdings for this fund include Vale SA Class B ADR, Petroleo Brasileiro SA ADR, China Mobile Ltd, America Movil SAB de CV, Gazprom OAO ADR, Industrial & Commercial Bank of China, Samsung Electronics Co. Ltd. GDR, China Construction Bank Corp, Itau Unibanco Holding SA ADR, and CNOOC Ltd.


2. iShares MSCI Emerging Markets Index - EEM

iShares MSCI Emerging Markets Index is the second largest emerging market stock ETF with 45.09 Billion of net asset. It has been around since 2003. The ishares MSCI Emerging Market Index ETF seeks to track the price and yield performance of the MSCI Emerging Markets index. The fund generally invests at least 90% of assets in the securities of the underlying index or in ADRs and GDRs representing such securities. The index was developed by MSCI as an equity benchmark for international stock performance. The total expense ratio is 0.72% per year which is low compare to most emerging market stock mutual funds. This fund is passively managed hence it is tracking its index.

The primary portfolio consists of large cap value international stocks. As of November 2010, the Top 5 sectors of fund are Financial Services, Energy, Materials, Information Technology and Telecommunication Services. Top 10 largest equity holdings for this fund include Samsung Electronic GDR, Petrobras – Petroleo Bras-PR, China Mobile Ltd, Vale SA ADR, OAO Gazprom ADS, Banco Itau Holding Financeira SA ADR, Taiwan Semiconductor SP ADR, America Movil SAB DE CV-SER L, Infosys Technologies ADR and Petrobras – Petroleo Bras.

 

3. SPDR S&P Emerging Markets Small Cap - EWX

This SPDR S&P Emerging Markets Small Cap is another passively managed ETF which tracks its index benchmark, S&P Emerging Markets under USD2 Billion Index. The ETF seeks to replicate, net of expenses, the Emerging Markets under USD 2 Billion index. The fund invests at least 80% of assets in securities that comprise the index. The index is a float adjusted market cap weighted index that represents the small capitalization segment of emerging countries included in the BMI Global Equity index. The total expense ratio is only 0.66% per year. This ETF has no Morningstar Rating currently.

The primary portfolio consists of mid cap value internationalemerging market stocks. Since the most of net asset company in this ETF is lower than 2 Billion USD, this ETF will trade more volatile than the previous two ETFs (i.e. during the up day, the ETF can move more than other ETF and vice versa). As of December 2010, the Top 5 sectors of fund are Information Technology, Industrials, Financials, Consumer Discretionary and Materials. Top 10 largest equity holdings for this fund include Empresas La Polar, Bec World, Lewis Group Ltd, Reunert, Jd Group, Thanachart Capital, Patni Computer Sys, Tv Azteca Sab De C, Randon Sa Implemen and Megaworld Corp.


4. iShares MSCI BRIC Index - BKF

This iShares MSCI BRIC Index is another iShares fund family ETF provided by BlackRock. The iShares MSCI BRIC Index Fund seeks to provide investment outcome that correspond generally to the price movement and yield performance of the MSCI BRIC Index. The fund invests most of its assets (>80%) in component securities and in depositary receipts representing such securities. The underlying index consists of stocks traded primarily on the BM&FBOVESPA, Russian Trading System Stock Exchange, Moscow Interbank Currency Exchange, National Stock Exchange of India, Shanghai Stock Exchange, Shenzhen Stock Exchange and the Stock Exchange of Hong Kong. The total expense ratio is only 0.72% per year. This ETF has Morningstar Rating of 2 stars only due to being new. The fund was introduced on November 2007. This is the only ETF which purely invests in BRIC countries. This ETF maybe more volatile than other emerging market ETF since it is less diversified.

The primary portfolio consists of large cap blend international BRIC stocks. As of November 2010, the Top 5 sectors of fund are Financial Services, Energy, Materials, Information Technology and Telecommunication Services. The Top 5 countries of this ETF are China, Brazil, India, Russia and Bermuda. Top 10 largest equity holdings for this fund include China Mobile Ltd, Petrobras – Petroleo Bras – PR, Cia Vale Do Rio Doce Pref A, OAO Gazprom ADS, Reliance Industry GDR, Infosys Technologies ADR, Itau Unibanco Holding SA ADR, Petrobras – Petroleo Bras, ICI Bank LTD ADR, and HDFC Bank Ltd ADR.


5. Guggenheim BRIC - EEB

The Guggenheim BRIC investment seeks results that are equivalent to the performance of the Bank of New York BRIC Select ADR index before fees and expenses. The fund seeks to replicate the performance of the BNY BRIC index which is comprised of American depositary receipts ("ADRs") and global depositary receipts ("GDRs") selected, based on liquidity, from a universe of all listed depositary receipts of companies from BRIC countries such as Brazil, Russia, India and China currently trading on U.S. exchanges. The fund normally invests at most of total assets (>90%) in ADRs and GDRs that comprise the index.

The primary portfolio consists of large cap blend international BRIC stocks. As of November 2010, the Top 7 sectors of fund are Financial Services, Energy, Materials, Information Technology and Telecommunication Services. The top 4 fund geographic weighting countries of this ETF are Brazil, China, India, and Russia. Top 10 largest equity holdings for this fund include Petroleo Brasileiro ADR, Vale SA SP Pref ADR, Petroleo Brasileiros ADR Common, Vale SA Spon ADR, Itau Unibanco Holding SA ADR, China Mobile Ltd ADR, BCO Bradesco SA ADR, CNOOC Ltd ADS, Infosys Technologies ADR, and Petrochina Company Ltd ADR.

WisdomTree EM Equity Income Portfolio
WisdomTree EM Equity Income Portfolio

6. WisdomTree Emerging Markets Equity Income – DEM

WisdomTree Emerging Markets Equity Income Fund seeks investment results that correspond to the price and yield performance, before fees and expenses, of the WisdomTree Emerging Markets Equity Income Index. The WisdomTree Emerging Markets Equity income Index is a fundamentally weighted index that measures the performance of the highest dividend yielding stocks selected from the WisdomTree Emerging Markets Dividend Index. This ETF has the highest Morningstar Rating with 5 stars. The total expense ratio is only 0.63% per year. It also has a yield of 3.14% per year.

The primary portfolio consists of mid cap value international emerging market stocks. As of December 2010, the Top 5 sectors of fund are Telecommunication Services, Banks, Materials, Utilities, and Food, Beverage & Tobacco. The top 5 fund geographic weighting countries of this ETF are Brazil, Taiwan, Turkey, South Africa and Israel. Top 10 largest equity holdings for this fund include Banco do Brasil, Taiwan Semiconductor Manufacturing Co Ltd, Lukoil OJSC ADR, Bank of China Ltd, Cia Bebidas das Americas – Ambev, HTC Corporation, Chunghwa Telecom Co Ltd, Turk Telekomunikasyon AS, KGHM Polska Miedz SA Br, and Cez-Ceske Energeticke Zavody.


7. WisdomTree Emerging Mkts SmallCap Dividend - DGS

WisdomTree Emerging Markets Small Cap Dividend is another ETF offered by WisdomTree. The ETF investment seeks to track the price movement and yield performance of the WisdomTree Emerging Markets SmallCap Dividend index before fees and expenses. The fund utilizes a passive management (or indexing) investment approach designed to track the performance of the WisdomTree Emerging Markets SmallCap Dividend index. It attempts to invest all, or substantially all, of assets in the stocks that make up the index. The fund generally uses a representative sampling strategy to achieve its investment objective. This ETF also has the highest Morningstar Rating with 5 stars. The total expense ratio is only 0.63% per year. It also has a yield of 2.78% per year.

Note: The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally weighted index that measures the performance of primarily small cap stocks selected from the WisdomTree Emerging Markets Dividend Index.

The primary portfolio consists of mid cap (small cap) value international emerging market stocks. As of December 2010, the Top 5 sectors of fund are Capital Goods, Basic Materials, Real Estate, Transportation and Technology Hardware & Equipment. The top 5 fund geographic weighting countries of this ETF are Taiwan, South Africa, Korea, Thailand and Turkey. Top 10 largest equity holdings for this fund include Ford Otomotive Sanayii AS, Discount Investment Corp, CorpBanca SA, AES Tiete SA, Dogan Holding, U-Ming Marine Transport, Koor Industries, Delek Automotive Systems Ltd, Inversiones Aguas Metropolitanas SA, and Soc Inversiones Oro Blanco.

ETF Performance as 12/4/2010

(click column header to sort results)
No  
Fund Description  
3 month  
YTD  
1 YR  
3 YR  
5 YR  
1
Vanguard Emerging Markets Stock ETF
19.66%
10.88%
19.57%
-1.70%
12.09%
2
iShares MSCI Emerging Markets Index
19.96%
8.63%
16.80%
-1.51%
11.50%
3
SPDR S&P Emerging Markets Small Cap
20.62%
15.35%
26.32%
N/A
N/A
4
iShares MSCI BRIC Index
16.52%
5.19%
15.62%
N/A
N/A
5
Guggenheim BRIC
18.46%
5.32%
16.26%
-0.69%
N/A
6
WisdomTree Emerging Markets Equity Inc
23.58%
15.55%
21.50%
6.71%
N/A
7
WisdomTree Emerging Mkts SmallCap Div
25.93%
19.58%
28.26%
N/A
N/A
8
BLDRS Emerging Markets 50 ADR Index
15.30%
2.73%
10.85%
-3.31%
12.67%
9
PowerShares FTSE RAFI Emerging Markets
16.64%
4.28%
12.33%
-1.26%
N/A
10
SPDR S&P BRIC 40
14.39%
4.41%
13.38%
-3.23%
N/A

Where can I purchase these ETFs?

Like stock trading, you will need a brokerage to buy ETFs such as:

  • OptionsHouse - You can trade stock, CEF, ETF for $2.95 per trade. It also offers one stop shop for mutual fund or ETF as well as cash management banking.
  • Lightspeed Trading – One of the cheapest discount brokerage. It only cost $0.00395 per shares with $0.40 minimum.
  • Interactive Brokers (IB) – Another cheap online brokerage. It offers various commission package for active traders.
  • Zecco – If you have $25,000 account balance, investor can get 10 free trades per month.
  • eOption - Trade stocks, ETFs, CEF for $3.00 per trade.

Disclosure: I have no affiliation with any of these ETFs. I also have no position in any of these funds currently. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results.


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Comments 8 comments

LillyGrillzit profile image

LillyGrillzit 6 years ago from The River Valley, Arkansas

Thank you for Top 7 Popular diversified emerging stock ETF. These Hubs are filled with sound financial investing information. Way to go, you are a powerhouse.


chan0512 profile image

chan0512 6 years ago from Camarillo, CA Author

Thanks my friend. Glad you like the article. More to come for sure.


medor profile image

medor 5 years ago from Michigan, USA

Thank you so much for writing this... I am in the process of getting my self directed IRA together and want to do stocks... this is exactly what I wanted to add to my portfolio you rock


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

Medor,

I'm glad you find this info useful. ETF is a new investment vehicle. Not many website or screener provide complete list. So I thought I do some research about it especially Emerging Market Stocks ETF since I believe this is the only growing area for future.


Dunlap Wealth profile image

Dunlap Wealth 5 years ago from Atlanta, GA

Great info. thanks. btw how did you do the sortable column header on the table?


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

Thanks Dunlap Wealth! More to come about ETF. Stay tune.

About the sortable table, You can select the function in the table module. Just click and check "Make table sortable?" function in the table module (this option is right above your table in the module). Let me know if you need help.


Jenny Calender profile image

Jenny Calender 5 years ago

Also working on my self directed IRA, so great info to have handy. Thanks!


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

Jenny Calender, You are welcome! Glad you find this information useful. ETF is a new type of investment, there is still very little info in the web.

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