Five Unheralded Emerging Markets ETFs With Over $100M In AUM
As we've reported this week the pace of ETF closures is gaining steam in late in the year, particularly among smaller issuers that specialize in funds that serve very narrow investment segments.
There has always been emphasis on the ability of an ETF sponsor to attract enough assets to a particular fun. After all, it is assets under management (AUM) even more than volume that validates an ETF's existence and extends its lifespan.
Along those lines it could be that attracting and keeping AUM will be the new black for the ETF industry in 2012, not coming up with kitschy ideas for new funds. But let's not get too negative too fast. There are some under-the-radar emerging markets ETFs that have over $100 million in AUM, more than enough to survive, that could be worth looking at next year.
Here are five to put on your 2012 emerging markets ETF shopping list.
Global X China Consumer ETF (NYSE: CHIQ): Yes, the emerging markets consumer story took a bit of breather in 2011. And yes, China-specific ETFs have been taken to the woodshed as well. The Global X China Consumer ETF is no exception to that, but the 40-stock ETF has actually outperformed the larger Guggenheim China Small-Cap ETF (NYSE: HAO) and CHIQ has the asset base to keep it around for the long-term. AUM: $118.9 million.
EGShares Emerging Markets Consumer ETF (NYSE: ECON): We'll get away from the consumer ETFs in a minute, but in the meantime it's worth mentioning the EGShares Emerging Markets Consumer ETF, one of the first ETFs to address the EM consumer story, has outperformed plenty of other multi-country ETFs this year. To name a few, ECON has done better than the Vanguard MSCI Emerging Markets ETF (NYSE: VWO), the iShares MSCI Index Fund (NYSE: EEM) and the iShares S&P Latin America 40 Index Fund (NYSE: ILF). Get real-time trade ideas here. AUM: $254 million.
Global X FTSE Colombia 20 ETF (NYSE: GXG): Though it may not be saying much, the Global X FTSE Colombia 20 ETF has been the best performer among the four major large-cap country-specific ETFs tracking South American economies, sharply outpacing comparable funds devoted to Brazil, Chile and Peru. GXG has been thrown out with Brazil's bathwater, but on the back of rising oil production and a cheap valuation, the ETF is poised for bigger things in 2012. Consider initiating positions with GXG above $19.50. AUM $126.7 million.
Schwab Emerging Markets Equity ETF (NYSE: SCHE): If ever there was a "me too" ETF, the Schwab Emerging Markets Equity ETF is it. The differences between this ETF and VWO and EEM are slight in terms of holdings and allocations, but the Schwab offering is far cheaper than EEM. SCHE has performed inline with VWO and EEM this year and with an expense ratio that is almost two-thirds less than EEM's, SCHE is at least a better option than the iShares fund. AUM: $385.4 million.
SPDR S&P Emerging Markets Dividend ETF (NYSE: EDIV): Home to 105 stocks and a yield of 7.2%, the SPDR S&P Emerging Markets Dividend is hardly mentioned in the emerging markets dividend ETF conversation. Despite being down for the year, EDIV is the second-best performer on this list after ECON. The ETF offers double-digit allocations to five sectors and the top five country weights are Taiwan, Brazil, China, Korea and South Africa.
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