Morgan Stanley Likes Some EM ETFs, Others Not So Much

Morgan Stanley adjusted its emerging markets portfolio today, boosting exposure to the iShares MSCI Philippines Invstable Market Index Fund (NYSE: EPHE), citing the Philippines' account surplus. EPHE moved from #11 to #5 among emerging markets based on the country's improving earnings as well as better expected return on equity, Barron's reported.

Morgan Stanley also raised the iShares MSCI Chile Investable Market Index Fund (NYSE: ECH) to the #9 spot in its emerging markets model while the SPDR S&P China ETF (NYSE: GXC) reclaimed the top spot.

The iShares MSCI Korea Index Fund (NYSE: EWY), the largest South Korea-specific ETF was downgraded as Morgan Stanley this is an ideal time for investors to move out of the ETF, Barron's reported.

The iShares MSCI Russia Capped Index Fund (NYSE: ERUS) and the iShares MSCI Brazil Index Fund (NYSE: EWZ) occupied the second and third spots in the Morgan Stanley EM model.

Brazil, Chile, the Philippines and Russia were all highlighted in Benzinga's emerging markets ETFs to watch in 2012 list published earlier this week.

Morgan Stanley also has a consolidated emerging markets model where the Vanguard MSCI Emerging Markets ETF (NYSE: VWO) gets a 78% weight, according to Barron's.