Invesco S&P Emerging Markets Low Volatility ETF (ARCA: EELV)

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Low Volatility EM ETFs Are Doing Their Jobs

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Low Volatility EM ETFs Are Outperforming, Too

As part of its previously announced expansion, <a href="https://www.benzinga.com/money/online-stock-trading/">Fidelity&#39;s </a>commission-free exchange traded funds platform includes ETFs from 11 issuers new to the lineup.
<h3>What Happened</h3>
In February, Boston-based Fidelity <a href="https://www.benzinga.com/news/19/02/13153841/fidelitys-commission-free-etf-platform-is-growing">announced plans</a> to boost the size of its commission-free ETF offering to over 500 funds. Previously, the firm&#39;s no commission ETF stable featured only Fidelity funds and iShares products.
Fidelity is adding to that stable in significant fashion with the addition of 150 ETFs from 11 other sponsors.
<h3>Why It&#39;s Important</h3>
The issuers new to the Fidelity commission-free ETF suite are American Century, First Trust, Franklin Templeton, Goldman Sachs Asset Management, Invesco, Janus Henderson, John Hancock Investments, J.P. Morgan Asset Management, Legg Mason Global Asset Management, PIMCO andState Street Global Advisors SPDR ETFs.
The ETFs available to Fidelity clients sans commission hail from 69 Morningstar investment categories and have average annual expense ratios of 0.36 percent.
&ldquo;Industry assets under management in Fidelity&rsquo;s available commission-free ETFs account for 40% of the overall U.S. ETF market,&rdquo; said Fidelity in a Monday statement. &ldquo;Fidelity has more than $450 billion in ETF client assets under administration.&rdquo;
Fidelity has over 28 million brokerage accounts for institutional and retail investors.
<h3>What&#39;s Next</h3>
Well-known iShares <a href="https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/all-commission-free-ETFs.pdf">funds on Fidelity&#39;s</a> commission-free platform include the iShares Gold Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/iau#NYSE">IAU</a>), iShares MSIC Hong Kong ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ewh#NYSE">EWH</a>), iShares China Large-Cap ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fxi#NYSE">FXI</a>) and the iShares MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eem#NYSE">EEM</a>).
Popular SPDR ETFs available to Fidelity clients without commission include the SPDR DoubleLine Short Duration Total Return Tactical ETF (CBOE: STOT) and the SPDR DoubleLine Emerging Markets Fixed Income ETF (CBOE: EMTL).
Large Invesco ETFs on the Fidelity commission-free platform include the Invesco Emerging Markets Sovereign Debt ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pcy#NYSE">PCY</a>) and the Invesco S&amp;P Emerging Markets Low Volatility ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eelv#NYSE">EELV</a>) as well as several other alternative, fixed income and international equity funds.
iShares, SPDR and Invesco are the largest, third- and fourth-largest U.S ETF sponsors, respectively.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/19/06/13846099/best-sector-etfs-for-june-utilities-and-health-care">Best Sector ETFs For June</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/19/06/13846088/an-enticing-small-cap-etf">A Winning Small-Cap ETF</a>

Admittedly, the time frame is small and the full benefits of owning low volatility stocks and exchange-traded funds are best measured over the long term. Over the past month, however, low volatility emerging markets ETFs are topping their more traditional counterparts as stocks in developing economies have been caught up in the pullback seen here in the United States.
Emerging markets investors are skirting once hot cyclical sectors, such as technology, in favor of lower beta fare, including consumer staples. That&#39;s a trend that often benefits low volatility ETFs.
&ldquo;Companies whose fortunes are closely tied to economic growth, such as those making car parts, have fallen out of favor in the past month,&rdquo; <a href="https://www.bloomberg.com/news/articles/2018-04-03/stock-rotation-comes-to-emerging-markets-as-defensives-take-lead">reports Bloomberg</a>. &ldquo;Firms whose products are in demand regardless of economic cycles (no matter what, people will shave) are rallying in their stead.&rdquo;
<h3>
	Data Confirmation</h3>
From March 1&nbsp;through April 3, the MSCI Emerging Markets Index lost a tenth of a percent. That&#39;s better than the 2.2 percent lost by the S&amp;P 500 over the same period, but some emerging markets ETFs are doing better than both of those widely followed indexes.
The iShares Edge MSCI Min Vol Emerging Markets ETF (CBOE:EEMV) and the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) are up an average of 2 percent over that period.
And yes, EELV and EEMV are doing their jobs when it comes being lower volatility bets. Again, one month isn&#39;t the appropriate measuring stick for volatility reduction strategies, but from March 1&nbsp;through April 3, the average volatility on EELV and EEMV <a href="https://www.etfreplay.com/charts.aspx">was about 16 percent</a> compared to almost 24 percent for the MSCI Emerging Markets and nearly 21 percent on the S&amp;P 500.
<h3>
	Some Surprises</h3>
With investors avoiding emerging markets technology stocks, it can be considered surprising that EEMV is trading higher since early March. That ETF allocates over 23 percent of its weight to tech, its second-largest sector weight. Lower beta consumer staples and telecommunications names combine for over 20 percent of EEMV&#39;s roster.
For its part, the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio has an almost 13 percent consumer staples weight but devotes just 7.58 percent to tech stocks.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/04/11449400/the-best-sector-etfs-for-april-looking-for-a-rebound">Best Sector ETFs For April</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/04/11456711/another-sector-spdr-etf-is-coming">Another Sector SPDR ETF is Coming</a>

Maybe it is a case of not letting exchange-traded funds such as the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)) have all the fun, but emerging markets equivalents are joining their U.S.-focused low volatility counterparts in outperforming traditional benchmarks this year.
While investors are being led to believe this an incredible year for emerging markets equities, the widely followed MSCI Emerging Markets Index is up just 0.7 percent year-to-date. That pales in comparison to the returns offered by the iShares MSCI Emerging Markets Minimum Volatility ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>)) and the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)).
<h3>A Closer Look AT EELV And EEMV</h3>
EELV and EEMV are up 5.4 percent and 1.8 percent, respectively, year-to-date. Importantly, the time could be right to consider these funds because &ldquo;sell in May&rdquo; can apply to emerging equities, too.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7948900/why-this-low-volatility-etf-just-keeps-chugging-along">Why This Low Volatility ETF Just Keeps Chugging Along</a></bzrelatedlink>
&ldquo;The May through October seasonal softness, often referred to as the &#39;Sell in May&#39; period, is not just a U.S., large-cap phenomenon according the Sam Stovall, Equity Strategist for S&amp;P Global Market Intelligence. Since 1998, the S&amp;P Emerging BMI Index advanced an average of 11.5 percent, from November and April but declined 0.2 percent in May and October. However, the S&amp;P BMI Low Volatility Emerging Markets index was up 1.0 percent on average during this May to October period,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a note out Monday.
<h3>Country And Sector Differences</h3>
Wide return discrepancies between EELV and EEMV underscore some important country- and sector-level differences between the two ETFs. For example, EEMV&#39;s country lineup is almost predictable, although that is not a bad thing, with a combined weight of almost 29 percent to Taiwan and South Korea, historically two of the <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/05/7948918/quality-works-for-this-emerging-markets-etf">least volatile emerging markets</a>.
EELV allocates 26.8 percent of its combined weight to those two low beta emerging markets, but the PowerShares ETF&#39;s weight to Malaysia, another historically low beta developing market, is nearly 600 basis points more than that of its iShares rival.
China exposure between the two ETFs varies in a big way. EEMV has an 18.2 percent weight to Chinese stocks, making that country the ETF&#39;s biggest geographic weight. On the other hand, EELV devotes just 3.5 percent to China, making it that fund&#39;s smallest country exposure.
&ldquo;As their names imply, these ETFs have generated below-average volatility relative to the iShares MSCI Emerging Markets Index ETF (EEM). As of the end of April 2016, EEMV&rsquo;s and EELV&rsquo;s standard deviation of 13.0 and 13.8 were lower than EEM&rsquo;s 16.4. Though EELV has been the better performer to start to 2016, it lost more money in 2015 (19 percent vs. 12 percent for EEMV),&rdquo; added S&amp;P Capital IQ.

Investors are hearing plenty this year about the boffo performances turned in by low volatility exchange-traded funds. They are also hearing quite a bit about the resurgence of emerging markets stocks and ETFs.
Marry those two themes and the result is a perfect explanation as to why the iShares MSCI Emerging Markets Minimum Volatility ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>)) is up 6.5 percent year-to-date. While EEMV is lagging the iShares MSCI Emerging Markets Indx (ETF) (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) by 130 basis points, that does not mean the case for EEMV is extinct.
<h3>Low Volatility ETFs, Here And Abroad</h3>
As is the case with U.S.-focused low volatility ETFs, it is reasonable to expect an international equivalent, such as EEMV, to lag traditional funds when the target asset class is overtly rallying. And that is what emerging markets stocks are doing this year. Likewise, it should be expected that when emerging markets stocks slump, EEMV will perform less poorly, which the fund did last year.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/04/7871045/evaluating-tracking-error-concerns-and-low-volatility-etfs">Evaluating Tracking Error Concerns And Low Volatility ETFs</a></bzrelatedlink>
&ldquo;This strategy has had a good track record. During the trailing 15- and 10-year periods through March 2016, this fund&#39;s underlying index generated about 400 basis points of annualized outperformance versus the cap-weighted MSCI Emerging Markets Index, with significantly lower volatility,&rdquo; said Morningstar <a href="http://news.morningstar.com/articlenet/article.aspx?id=668065">in a recent note</a>.
<h3>What Sets EEMV Apart?</h3>
Indeed, EEMV makes good on the low volatility promise. The ETF&#39;s <a href="https://www.ishares.com/us/products/239641/EEMV?referrer=tickerSearch">three-year standard deviation</a> of 13.3 percent is 330 basis points below the same metric on EEM.
EEMV&#39;s recipe for volatility reduction is not a surprise. For example, Brazil and Russia are two of the most volatile emerging markets and only represent a fraction of EEMV&#39;s lineup. Actually, the ETF features no Russia exposure while allocating less than 1.4 percent to Brazilian stocks.
On the other hand, historically low beta developing economies Malaysia, South Korea and Taiwan combine for about 38 percent of EEMV&#39;s geographic weight. Of the 17 countries represented in EEMV, China commands the largest weight at nearly 18.5 percent.
&ldquo;Thanks in part to the heterogeneity of the emerging-markets equity asset class, low-volatility strategies in emerging markets have historically resulted in a greater reduction in portfolio volatility relative to a cap-weighted index than in U.S. equities. In other words, there is more diversity (lower correlations) among emerging-markets equities, which allows for greater reduction in price fluctuations in an emerging-markets low-volatility portfolio,&rdquo; added Morningstar.
EEMV has a rival in the form of the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)). EELV is up 11.5 percent year-to-date, an advantage that is largely attributable to the ETF&#39;s overweight position in rebounding South African stocks.

Low Volatility Is Working Here, Too

Major emerging markets equity benchmarks have already notched double-digit declines just three weeks into January after doing the same last year, and China is a big reason why.
 Significant capital outflows from China are pressuring the yuan and the currency&#39;s decline is, in turn, weighing on stocks in the world&#39;s second-largest economy.
<h3>The Emerging Market Situation</h3>
Throughout much of this now multi-year emerging markets slump, investors keep hearing how inexpensive developing world equities are. However, what appear to be compelling valuations <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/11/5981415/just-how-inexpensive-are-emerging-market-etfs">have not been enough</a> to lure investors back to this asset class.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/01/6157676/this-emerging-markets-etf-should-be-less-bad">This Emerging Markets ETF Should Be Less Bad</a></bzrelatedlink>
In fact, emerging markets exchange-traded funds have bled nearly $4 billion just this month. 
&ldquo;I believe the bearish tone of the Chinese market is largely a reflection of both capital outflows and a significant debt bubble. It&rsquo;s difficult to get a grip on the mountain of Chinese debt and its impact on the economy, but press stories have highlighted the potential economic stress resulting from high debt,&rdquo; said PowerShares <a href="http://www.blog.invesco.us.com/examining-factor-performance-weakness-in-chinese-yuan">in a recent note</a>.
 &ldquo;The Wall Street Journal recently covered the surge in new government and corporate bond issuance in China and sinking profits at state-owned companies. An analyst interviewed as part of the story suggested that bad loans in the most distressed sectors of the economy could lead to $151.7 billion in bad loans and cause 1.7 million workers to lose their jobs.&rdquo;
<h3>Taking Sanctuary In The Year's Rough Beginnings</h3>
With stocks off to a rough start in 2016, advisors and investors are wondering, and rightfully so, where to hide. Though not guaranteed to rise in turbulent markets, low volatility ETFs such as the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)) <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/01/6126497/for-this-low-vol-etf-its-not-all-about-sector-selection">can help investors</a> weather rocky markets.
 SPLV, one of the largest low volatility ETFs on the market today, has been less bad than the S&amp;P 500 this year.
Investors have added nearly $194 million to SPLV this year, a total exceeded by just one other PowerShares ETF.
<h3>Emerging Markets Counterpart To SPLV</h3>
SPLV has an emerging markets counterpart, the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)). Though its year-to-date performance is nothing to crow about, the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio has been more than 400 basis points less bad than the MSCI Emerging Markets Index. 
EELV&#39;s underlying index &ldquo;is compiled, maintained and calculated by Standard &amp; Poor&#39;s and consists of the 200 least volatile stocks of the S&amp;P Emerging BMI Plus LargeMid Cap Index over the past 12 months,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=EELV&amp;title=powershares-s-p-emerging-markets-low-volatility-portfolio">according to PowerShares</a>.
Due to the fact that Chinese equity market volatility spiked in the latter stages of 2015, the country is EELV&#39;s smallest country weight at just over 3 percent. Taiwan and Malaysia combine for about 36 percent of EELV&#39;s weight. 
&ldquo;The fallout from the Chinese yuan crisis has allowed investors to examine the performance of investment factors in a new light. When analyzed against periods of weakness in the Chinese yuan, low volatility and quality emerge the clear winners,&rdquo; added PowerShares.
Image Credit: <a href="https://pixabay.com/en/money-currency-yuan-mao-business-17418/">Public Domain</a>

Intraday Update

Where To Hide With ETFs When China Is A Problem

This has been one of those years when the low volatility factor, as it applies to exchange-traded funds, is proving to be a better bet than traditionally-weighted funds. For example, the PowerShares S&amp;P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>)) is higher by 2.8 percent year-to-date, an advantage of 60 basis points over the S&amp;P 500.
<h3>The Low Volatility Edge</h3>
Low volatility ETFs are not limited to the confines of U.S. borders, nor is the year-to-date performance advantage offered by these funds limited to U.S.-focused ETFs. When it comes to low volatility emerging markets ETFs, some of those products have topped their traditional counterparts, which is to say low volatility emerging markets ETFs have been <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5879073/slicing-and-dicing-the-s-p-500-with-etfs">less bad</a> than their regular rivals.
&ldquo;Emerging markets ETFs were under pressure during the first nine months of 2015 on concerns about slower economic growth and the impact of pending actions by the Federal Reserve. But in October, emerging markets have been much stronger. For those who want to stay invested in this style, but reduce their potential risk, low volatility ETFs might be appealing.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/markets/binary-options/15/09/5841163/volatility-indexes-there-are-more-out-there-than-just-the-vix">Volatility Indexes: There Are More Out There Than Just The VIX</a></bzrelatedlink>
&ldquo;Through a rules-based approach, the index the ETF seeks to track chooses the stocks that have recently exhibited the lowest volatility. But of course there are differences between these products that are worth understanding,&rdquo; said <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a> in a new research note.
<h3>EEM And EEMV</h3>
The iShares MSCI Emerging Markets Minimum Volatility ETF (iShares Inc. (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>)), the low volatility answer to the popular iShares MSCI Emerging Markets Indx (ETF) (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>), is down 3.9 percent this year. EEMV&#39;s loss, though nothing to brag about, is only half as bad as EEM&#39;s.
Low volatility in emerging markets usually means large weights to Malaysia, South Korea and Taiwan. Those countries combine for almost 38 percent of <a href="http://www.ishares.com/us/products/239641/EEMV">EEMV&#39;s weight</a>, well above the roughly 31 percent EEM allocates to that trio.
&ldquo;The $2.85 billion EEMV &ldquo;holds 258 stocks in the broader MSCI emerging markets index that have below-average volatility. However, there are both sector and country bands that stay within 5 percent of the parent index at the semi-annual rebalance. The goal is to get a low volatility portfolio without introducing a potential concentration either by sector or country,&rdquo; noted S&amp;P Capital IQ.
EEMV has a rival in the form of the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)). EELV has trailed EEMV this year and a large part of that can be tied to EELV&#39;s 10.4 percent weight to struggling South African stocks, an allocation that is nearly 500 basis points above that of <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5934918/this-emerging-markets-etf-could-have-to-endure-a-credit-downg">EEMV&#39;s South Africa weight</a>.
Additionally, EELV&#39;s South Korea weight is just 4.7 percent. The ETF embraces low volatility via a combined weight of over 36 percent to Taiwan and Malaysia.
&ldquo;It is still too early to have a good read on when emerging markets will recover from the 2015 doldrums. However, we think a low volatility approach offers investors with a way to participate in the stronger growth prospects of emerging markets, while trying to reduce their risk profiles,&rdquo; said S&amp;P Capital IQ.
EELV and EEMV charge 0.29 percent and 0.25 percent per year, respectively.
Image Credit: <a href="https://pixabay.com/en/globe-earth-old-globe-940369/">Public Domain</a>

Ditching Volatility With Emerging Markets ETFs

Recent outflows aside, it is still fair to say low volatility ETFs are popular. It is certainly accurate to say they are large.

	The PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) and the rival iShares MSCI USA Minimum Volatility ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) have about $6.5 billion in combined assets under management.

	The emerging markets equivalents of those funds, the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) and the iShares MSCI Emerging Markets Minimum Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>), are among a small number of emerging markets ETFs that have been able to garner inflows even as developing world stocks have tumbled.

	Related: <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/04/3465273/low-vol-etf-inflows-underscore-rallys-risk-off-nature">Low Vol ETF Inflows Underscore Rally's Risk-Off Nature</a>.

	However, emerging markets ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3897793/emerging-markets-small-cap-etfs-rebounding">have been bouncing back</a>. If the recent rally proves durable, risk-tolerant investors may want to eschew low volatility for high beta. The PowerShares S&amp;P Emerging Markets High Beta Portfolio (NYSE: <a class="ticker" href="/stock/eehb#NYSE">EEHB</a>) is the ETF with which to do just that.

	Simply put, EEHB is EELV's high beta cousin. EEHB tracks the S&amp;P BMI Emerging Markets High Beta Index, which is comprised of " the 200 stocks from the S&amp;P Emerging BMI Plus LargeMid Cap Index with the highest sensitivity to market movements, or beta, over the past 12 months," <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=EEHB">according to PowerShares</a>.

	EEHB is in fact sensitive to market movements. That much is evident by the ETF's 6.7 percent gain in the past five trading sessions. That does not tell EEHB's entire story. With just $4.4 million in asssets under management, many investors <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/03/3413646/3-high-beta-etfs-your-broker-forgot-to-mention">gloss over this fund</a>. That means over the past 90 days, they missed out on EEHB's 10.7 percent jump, a gain that was roughly twice as good as the Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>).

	Over the past six months, both of those ETFs are down, but EEHB, high beta and all, has slightly outperformed VWO.

	One reason that is the case is, at the country level at least, EEHB does not present investors with excessive risk. Brazil, India and Indonesia fit the bill <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/05/3588253/are-you-there-investors-its-us-india-etfs">as higher beta emerging markets</a>, but those countries combine for just 15 percent of EEHB's weight.

	China is the ETF's largest country weight at nearly 35 percent, but the three-year standard deviation on the iShares China Large-Cap ETF is 23.4 percent, just 300 basis points higher than the iShares MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>).

	South Korea, typically viewed as a lower beta developing market, is 24 percent of EEHB's weight. The three-year standard deviation on the iShares MSCI South Korea Capped ETF (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) is also about 300 basis points higher than EEM's.

	Poland and Taiwan, the latter of which is another low beta emerging market, combine for 7.7 percent of EEHB's weight and that more than takes care of the India and Indonesia exposure. So maybe EEHB is not too high beta after all.

	Another thing EEHB is not is richly valued. With China, South Korea and Russia combining for 62 percent of the ETF's weight, EEHB is more than adequately allocated <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/08/3865044/south-korea-etfs-prove-resilient">to some of the cheapest emerging markets</a>.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Short Ideas

Global

EEHB

USMV

Juiced Beta With This Emerging Markets ETF

More than eight months into the year, investors by now know the sad song sung by a plethora of emerging markets ETFs.

	Price decay among emerging markets ETFs has seemingly known no bounds as bond, currency, equity-based, diversified and single country funds have slumped.

	With about four months left in 2013, there are two clear, but diverging viewpoints on near- to medium-term outlook for emerging markets equities. One group believes widening account deficits, tumbling currencies and other factors will continue to plague once high-flying markets like India and Indonesia. The other group believes that the under-performance of developing world stocks relative to U.S. shares is bound to end soon as investors embrace compelling valuations.

	Both groups could be vindicated, but the bulls will fair treatment here as will the bears in another piece. Some emerging markets ETFs are already showing signs of life, indicating investors will want to keep an eye on the following multi-country funds.

	Related: <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3886878/some-em-etfs-were-pretty-good-in-august">Some EM ETFs Were Pretty Good In August</a>.

	First Trust Emerging Markets AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fem#NYSE">FEM</a>) 
	The First Trust Emerging Markets AlphaDEX Fund is an ideal ETF for the investor that wants ample China exposure, even more than is offered in large diversified emerging markets ETFs, without the commitment of a single-country fund. Additionally, FEM's 153 holdings have a median market value of just $5.1 billion, which shows the fund is not excessively exposed to state-controlled companies.

	China checks in at 31.4 percent of the FEM's weight, which is not a problem with <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/09/3890487/unique-china-etfs-in-rally-mode">Chinese stocks soaring as they currently are</a>. The question is what other countries will contribute to FEM's upside? It will have to be some combination of Brazil, Turkey, Thailand, Mexico and Poland, a group that combines for over 37 percent of FEM's weight.

	The prospect of Turkey and Thailand doing the heavy lifting appears dubious at the moment. Good news for valuation fanatics: FEM is cheap, even by the current low bar set by the broader emerging markets universe. FEM has a P/E ratio below nine and a price-to-book ratio below 1.2, <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FEM">according to First Trust data</a>.

	WisdomTree Middle East Dividend Fund (NASDAQ: <a class="ticker" href="/stock/gulf#NASDAQ">GULF</a>) 
	The WisdomTree Middle East Dividend Fund is not a pure emerging markets ETF because Qatar and the United Arab Emirates, almost 56 percent of the fund's weight, still have until May 2014 before making <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/06/3663268/msci-reclassification-puts-spotlight-on-these-etfs">the jump to emerging markets status</a>.

	GULF is off 6.6 percent in the past month due to two primary factors. First, investors have started to believe that stocks in Dubai became too richly valued in the run-up to the emerging markets promotion. Second, the situation in Syria has amplified volatility for ETFs with exposure to Middle East stocks.

	The Syria-induced decline has created a scenario where some of the hot money is getting shaken out of Dubai stocks, creating an opportunity for investors that realize the long-term potential of investing in Gulf Cooperation Council states. Investors are compensated for the risk <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3746992/an-unheralded-international-dividend-etf-destination">with under-appreciated dividends</a>. GULF's 30-day SEC yield is 5.23 percent.

	PowerShares S&amp;P Emerging Markets Low Volatility ETF (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) 
	EELV is already showing signs of being a legitimate rebound play with an almost three percent gain in the past week. The fund has a few other things in its favor, including no significant exposure to India and Indonesia. Simply put, "low volatility" and those markets do not belong in the same sentence.

	The obvious hurdle EELV has to deal with is its almost 17 percent weight to Malaysia, the fund's second-largest country weight behind Taiwan. Normally low beta compared to other emerging markets, Malaysia is home to deteriorating credit quality and immense structural issues, two factors that could prompt increased capital flight.

	EELV is buffered by exposure to Taiwan, Chile and South Korea, to name a few. In another sign of EELV is on the right track, it is one of a scant number of emerging markets ETFs to see net inflows this year. In fact, EELV's assets under management tally has <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3764783/an-etf-for-the-cautious-emerging-markets-investor">grown more than two and a half times</a> this year.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Dividends

Events

GULF

Diversified Emerging Markets ETFs With Rebound Potential

Thursday may not be the day to revisit this particular topic as plenty of marquee emerging markets ETFs are trading lower on the day.

	However, the past month has brought something of a modest resurgence for select emerging markets ETFs with many of the group's most popular names either eking out small gains or managing to be noticeably less bad than they have been for most of this year.

	Federal Reserve tapering fears have ebbed a bit and some emerging markets central banks, though not those in Brazil and India, remain committed to accommodating monetary policy giving investors some reason to at least consider developing market ETFs.

	Although economic growth is slowing in China this year, growth is seen rising in other BRIC nations and South Africa and South Korea in 2014 <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/07/3761321/s-p-sees-improvements-in-em-etfs">providing a possible catalyst for patient investors</a>.

	One ETF that capitalizes on the <a href="http://www.benzinga.com/news/13/03/3425018/powershares-low-volatility-etf-tops-4b-in-aum">ultra-popular low volatility theme</a> stands out as a way for investors to get involved with emerging markets right now without losing sleep. That fund is the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>).

	Around here, we've been fans of EELV for a while, going back to a time when the ETF still lived life below the overrated $100 million in assets under management mark. In December 2012, the fund had <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/01/3285027/low-vol-em-etfs-continue-raking-in-cash">$86.5 million in assets</a>. It now has $162.5 million, almost doubling its total in what has been a dismal year for emerging markets ETFs.

	EELV and the rival iShares MSCI Emerging Markets Minimum Volatility ETF (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) have both significantly increased their AUM totals this year indicating that while investors have withdrawn billions from other emerging markets ETFs, some of those dollars have flowed to low volatility products. EEMV's AUM total is about two-and-half times larger today than it was around Christmas 2012.

	The secret to EELV's potential allure to conservative investors really is not a secret at all. Just as sector weights can make significant differences with broad market ETFs and just as varying weights to the same stocks can make for varying returns with sector funds, country allocations can make all the difference with emerging markets ETFs.

	EELV is down just three percent in the past three months while some larger, diversified rivals are sitting on the double-digit losses and that performance gap is explained by what countries EELV includes and excludes.

	The fund's thin BRIC exposure <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/04/3465273/low-vol-etf-inflows-underscore-rallys-risk-off-nature">has previously been highlighted</a> as one of its primary advantages. Current combined exposure to China and Brazil is about 12 percent with no weights to India or Russia.

	As important as what EELV excludes at the country level is what it includes. That being a combined 40.5 percent weight to Taiwan and Malaysia, two Asian markets with low-beta reputations. Not only are Malaysia and Taiwan perceived as less volatile than other developing markets, <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3743123/look-to-malaysia-for-em-etf-exposure">the corresponding single-country ETFs</a> have recently been among the best performers tracking Asian nations.

	The wild card in EELV's lineup is South Africa at a weight of 12.8 percent. South Africa's status as a major precious metals producer levers stocks there gold, platinum and palladium prices. On the other hand, if a bottom is really in for gold, EELV could benefit. As it is, the iShares MSCI South Africa ETF (NYSE: <a class="ticker" href="/stock/eza#NYSE">EZA</a>) has traded slightly higher over the past month.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Commodities

An ETF For The Cautious Emerging Markets Investor

WisdomTree (NASDAQ: <a class="ticker" href="/stock/wetf#NASDAQ">WETF</a>), the fifth-largest U.S. ETF issuer by assets, has filed plans with the Securities and Exchange Commission to possibly introduced three new emerging markets ETFs.

	Among the possible new introductions New York-based WisdomTree filed for is the WisdomTree Emerging Markets Consumer Growth Fund. That ETF will draw constituents from a country universe of Brazil, Chile, China, Czech Republic, Hungary, India, Indonesia, Korea, Malaysia, Mexico, the Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey.

	Index eligibility requirements include a market value of at least $1 billion and average daily trading volume of at least $500,000 for each of the six months preceding the index rebalance, <a href="http://www.sec.gov/Archives/edgar/data/1350487/000119312513174177/d526366d485apos.htm#pro526366_1">according to the filing</a>.

	With a focus on emerging markets consumers, the WisdomTree Emerging Markets Consumer Growth Fund shapes up to be a potential rival to the EGShares Emerging Markets Consumer ETF (NYSE: <a class="ticker" href="/stock/econ#NYSE">ECON</a>), which debuted in 2010.

	WisdomTree also filed plans for the WisdomTree Emerging Markets Low Volatility Equity Fund. The starting universe is the 500 largest companies by market capitalization that are incorporated and traded in any of the following 17 emerging market nations: Brazil, Chile, China, Czech Republic, Hungary, India, Indonesia, Korea, Malaysia, Mexico, the Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey, <a href="http://www.sec.gov/Archives/edgar/data/1350487/000119312513174197/d526305d485apos.htm#pro526305_1">according to the filing</a>.

	That ETF's index is volatility weighted annually and caps sector and country exposure at 20 percent. The new ETF will face intense competition in the form of the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) and the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>).

	WisdomTree also filed plans for the WisdomTree Emerging Markets Dividend Growth Fund, which will track an index that "is a fundamentally weighted index that consists of emerging market dividend-paying stocks with growth characteristics," <a href="http://www.sec.gov/Archives/edgar/data/1350487/000119312513174220/d526313d485apos.htm#pro526313_2">according to the filing</a>.

	WisdomTree is already a dominant purveyor of emerging markets dividend ETFs as the WisdomTree Emerging Markets Equity Income Fund (NYSE: <a class="ticker" href="/stock/dem#NYSE">DEM</a>) has nearly $5.5 billion in assets under management. The WisdomTree Emerging Markets SmallCap Dividend Fund (NYSE: <a class="ticker" href="/stock/dgs#NYSE">DGS</a>) has almost $1.55 billion in AUM.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

New ETFs

Wisdomtree Emerging Markets Smallcap Dividend Fund

Emerging Global Shares Dow Jones Emerging Marketsnsumer Titan Index Fund

ECON

WETF

WisdomTree Planning Three New EM ETFs

Well-documented have been the struggles of emerging markets equities this year relative to U.S. stocks.

	Concerns about global growth, commodities demand, inflation and other issues have plagued developing stocks and, particularly at the ETF level, some of the worst laggards <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/03/3452210/slide-in-em-etf-exposes-country-weight-flaws">have also been the largest emerging markets</a>. That roster includes the four BRIC nations along with South Korea and Taiwan.

	Still, investors are putting some cash to work in emerging markets ETFs, though at a much slower clip than what was seen last year. In 2012, emerging markets ETFs and ETNs raked in $30.5 billion in capital, but that figure was just $4.6 billion in the first quarter after outflows of $4.7 billion in March alone, <a href="http://www.benzinga.com/news/13/04/3464797/etfs-set-q1-record-with-70-1b-of-inflows">according to BlackRock data</a>.

	Investors are also eschewing country-specific funds in favor of diversified emerging markets ETFs, though the iShares MSCI Mexico Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eww#NYSE">EWW</a>) gained $1.2 billion in inflows. Despite the struggles of the broader emerging markets group, some analysts see opportunity within the asset class.

	S&amp;P Capital IQ "believes that the expected stronger economic growth is driven by better demographic trends; lower worker to retiree ratios; a growing middle class; rapid urbanization, which fuels infrastructure spending and raw material demand; and natural resource wealth," the research firm said in a new note.

	Beyond the BRIC quartet of Brazil, Russia, India and China S&amp;P Capital IQ "advises casting a wide net to include lower-profile markets like Indonesia, Turkey and Mexico where performance has been much stronger than the BRIC markets in recent years, reflecting steadier growth, lower inflation and an uptick in investor interest."

	In the note, S&amp;P Capital IQ highlighted six diversified emerging markets ETFs, but only one earned an Overweight rating, the iShares Core MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>). IEMG debuted last October as part of the new core series of ETFs from iShares aimed at cost-conscious investors. Rather than lower the fees on the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) to be comparable to the rival Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), iShares created IEMG.

	It is hard to argue with the success iShares has had with the new fund. In just seven months, IEMG's low expense ratio of 0.18 percent has helped the fund attracted almost $915 million in assets, <a href="http://us.ishares.com/product_info/fund/overview/IEMG.htm?fundSearch=true&amp;qt=IEMG">according to iShares data</a>.

	IEMG is comparable to other major diversified emerging markets ETFs in that it devotes the bulk of its weight to China, South Korea, Brazil and Taiwan. Those countries combine for over 55 percent of the fund's weight. EEM also devotes over 55 percent of its weight to those countries. VWO, the largest emerging markets ETF by assets, is gently winding down its exposure to South Korea as Vanguard transitions to the FTSE Emerging Markets Index, which does not consider South Korea a developing market.

	VWO and EEM, the second-largest emerging markets ETF by assets, are rated Marketweight and Underweight, respectively, by S&amp;P Capital IQ.

	S&amp;P acknowledged some of the risks associated with investing in the developing world in the note.

	"While emerging markets offer investors higher potential rewards, they come with risks," said the research firm. "Relative to the S&amp;P 500 Index three-year standard deviation of 15, the MSCI Emerging Markets Index's standard deviation of 21 was quite high. Emerging markets have less capital market liquidity and transparency than developed markets but that that is reflected in much lower valuations than developed markets, with the MSCI EM Index trading at just 10.7X 2013 consensus estimated EPS vs. 14.2X for the S&amp;P 500 and 12.7X for the S&amp;P Europe 350 Index."

	Investors looking to mitigate emerging markets volatility have a couple of options as the low volatility craze seen with U.S.-focused ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/01/3285027/low-vol-em-etfs-continue-raking-in-cash">has permeated developing world funds as well</a>. S&amp;P has a Marketweight rating on the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>), which debuted in January 2012 and now has nearly $131 million in AUM.

	EELV tracks the S&amp;P BMI Emerging Markets Low Volatility Index. As of February, this S&amp;P index's standard 
	deviation was 16, well below the MSCI Emerging Markets Index, according to S&amp;P. EELV allocates about half of its weight to Malaysia, Taiwan and South Africa. The fund has an annual expense ratio of 0.29 percent.

	Interestingly, S&amp;P has Underweight ratings on two country-specific ETFs that have been leaders among emerging markets funds this year. The iShares MSCI Turkey Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>) is up seven percent year-to-date and was one of the top-performing emerging markets ETFs last year.

	The iShares MSCI Indonesia Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eido#NYSE">EIDO</a>) also earned an Underweight rating from S&amp;P, though that ETF has surged 10.7 percent on a year-to-date basis. EIDO and rival Indonesia ETFs have been buoyed by the country's <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/04/3460880/domestic-demand-stokes-indonesian-stocks-etfs">strong domestic demand story</a>.

	Indonesia, the world's fourth-largest country by population, is expected to post GDP growth this year of 6.25 percent this year, up slightly from 6.23 percent in 2012. Amid rising inflation and slack materials demand, the Jakarta Composite and EIDO will likely need strong contributions from discretionary and staples shares to continue to the upside.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Analyst Color

Analyst Ratings

iShares MSCI Indonesia Investable Market Index Fund

EIDO

IEMG

iShares MSCI Turkey Investable Market Index Fund

S&P Likes 1 Emerging Markets ETF, Tepid on 5 Others

With less than two hours left in Friday's session, the iShares MSCI South Korea Capped Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) easily fits the bill as one ETF that, if ETFs could sport human emotions, is glad this week is drawing to a close.

	EWY, one of the largest country-specific emerging markets with over $3.1 billion in assets under management, is on pace to finish the week down 6.3 percent. To be sure, it has been a case of "pick your poison" with EWY this week.

	The largest South Korea ETF has come under heavy selling pressure amid intensifying threats from North Korea. In recent days, North Korea has not been shy with its rhetoric regarding possible military aggression towards South Korea and the U.S.

	Investors in South Korean stocks and ETFs have been down this road before, but it is fair to say North Korea's sharp tongue is rarely good news for EWY. Arguably a more plausible explanation for EWY's ills is the weaker Japanese yen.

	EWY's vulnerability at the hands of a weaker yen <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3305954/three-etfs-that-could-suffer-from-a-weaker-yen">was highlighted two months ago</a>, but with the Bank of Japan unveiling more aggressive stimulus measures on Thursday, investors are once again reminded about this ETF's vulnerability to a plunging yen.

	While talk of South Korean equities being hampered by the weaker yen has increased in recent days, this scenario is nothing new and has been playing out for all of 2013. The yen is the worst-performing developed market currency in the world this year and that is just how Japanese Prime Minister Shinzo Abe wants it.

	Including today's loss, the CurrencyShares Japanese Yen Trust (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>) is down about 11 percent year-to-date. EWY has actually overshot that loss with a year-to-date retrenchment of nearly 15 percent. Said another way, EWY is displaying an intimate negative correlation to the ProShares UltraShort Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>), which has surged more than 22 percent this year.

	EWY is not the only ETF being hit by weakness in South Korean stocks. The country is still classified as an emerging market by some index providers and has a <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/03/3452210/slide-in-em-etf-exposes-country-weight-flaws">significant presence in some of the largest diversified emerging markets ETFs</a>.

	For example, South Korea has a weight of 14.5 percent in the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>). EEM is off more than three percent this week and more than eight percent this year.

	Other ETFs being hindered by the plummeting yen include the $243.6 million iShares S&amp;P Asia 50 Index Fund (NYSE: <a class="ticker" href="/stock/aia#NYSE">AIA</a>), which features an almost 28 percent weight to South Korea. Samsung is that ETF's largest holding with a weight that is more than double the second-largest holding (14.3 percent compared to 5.88 percent. AIA, which has been hit by its significant China exposure, is off nearly six percent this week.

	The $2.68 billion iShares MSCI All Country Asia ex Japan Index Fund (NASDAQ: <a class="ticker" href="/stock/aaxj#NASDAQ">AAXJ</a>) features a 19.1 percent allocation to South Korea and that has been enough to drag the ETF down more than three percent this week.

	Investors looking to dodge South Korea with diversified emerging markets ETFs can consider the Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), which is in the process of paring its exposure to the country, and the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>).

	EELV features a mere 6.5 percent weight to South Korea making it the ETF's fifth-largest country weight well behind Malaysia, South Africa, Taiwan and Chile.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Forex

iShares MSCI Alluntry Asia ex Japan Index Fund

AAXJ

One ETF That is Glad This Week is Over 

When it comes to sector ETFs, the proof is in the proverbial pudding regarding the risk off tenor of the rally in U.S. equities.

	Through April 1, the average year-to-date return for the low beta trio comprised of the Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>), the Health Care Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlv#NYSE">XLV</a>) and the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) was 14.2 percent compared to a 10.5 percent gain for the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>).

	Overt bullishness towards those ETFs and rival funds <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/04/3461115/materials-mess-these-etfs-are-in-trouble">while materials lag</a> underscores the notion that investors have preferred more docile fare as a means of getting exposure to equities.

	There is further confirmation of that as minimum volatility exchange traded products attracted $4.1 billion in new investments in the first quarter. During the quarter, low or minimum volatility ETPs raked in an average of $1.4 billion per month, more than triple the average monthly inflow of $416 million seen in 2012, <a href="http://www.benzinga.com/news/13/04/3464797/etfs-set-q1-record-with-70-1b-of-inflows">according to iShares data</a>.

	Of course past performance is not an indicator of future returns, but the recent gains by some of the marquee U.S.-listed "low vol" ETFs could be a sign that investors will continue to embrace these funds over riskier products.

	Through April 1, the iShares MSCI USA Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) was up 13 percent year-to-date while the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) was up 12.8 percent. Obviously, those are two performances well in excess of SPY's.

	To that end, it is not surprising that SPLV, the king of low volatility ETFs, has raked in $840.4 million in new assets this year, making it the second-best PowerShares ETF in 2013 in terms of inflows, <a href="http://invescopowershares.com/flows/">according to issuer data</a>.

	USMV attracted $1.68 billion in new assets in the first quarter, an inflow tally that ranks seventh among all the ETFs in the world for the first three months of 2013, according to iShares data. Combined, SPLV and USMV now have nearly $7 billion in assets under management.

	With investors favoring staples and health care names, it is easy to see why they have embraced SPLV and USMV. The iShares offering allocates more than 33 percent of its combined weight to those two sectors. So does SPLV, though that ETF's largest sector weight is 30.9 percent to utilities.

	Low volatility ETFs also continue to show their mettle at the emerging markets level. The iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) is down 4.6 percent year-to-date. Compared to that, the 0.2 percent loss for both the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) and the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) looks pretty good.

	EEMV now has almost $1.8 billion in AUM, up from $1.6 billion in late February. EELV has attracted $40.2 million in new capital this year, bringing its AUM total to $129.2 million.

	Like their U.S. equivalents, EELV and EEMV are heavy on conservative sectors. Staples, telecom and utilities combine for over a third of EELV's weight. Same goes for EEMV, indicating that regardless of where investors put money to work this year, U.S. or emerging markets, low beta/minimum volatility is a preferred asset allocation strategy.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

"Low Vol" ETF Inflows Underscore Rally's Risk-Off Nature

Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit, the fourth-largest U.S. ETF issuer, said today its popular PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) has topped $4 billion in assets under management. 

At the start of trading Monday, the PowerShares S&amp;P 500 Low Volatility Portfolio, the dominant U.S.-focused low volatility ETF, had $4.057 billion in assets under management, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=SPLV">according to PowerShares data</a>.

"Invesco PowerShares pioneered low-volatility ETFs. We take pride in being first to market with groundbreaking products, and SPLV is a prime example of our ongoing commitment to innovation," said Ben Fulton, Invesco PowerShares managing director of global ETFs, in a statement. "As the flagship low-volatility ETF on the market, SPLV has averaged over $7.6 million in inflows per day since its inception."

SPLV is comprised of the 100 S&amp;P 500 stocks with the lowest trailing 12-month volatility. Top holdings currently include Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>), PepsiCo (NYSE: <a class="ticker" href="/stock/pep#NYSE">PEP</a>) and General Mills (NYSE: <a class="ticker" href="/stock/gis#NYSE">GIS</a>). SPLV's top sector allocations are utilities at 30.74 percent an consumer staples at just over 20 percent. Financial services names account for 15.4 percent of the ETF's weight.

Since inception in May 2011, SPLV has gained 14.26 percent compared to a 9.63 percent gain for the S&amp;P 500 while being 570 basis points less volatile than the benchmark U.S. index, PowerShares said in the statement. SPLV has outperformed and been less volatile than the MSCI USA Minimum volatility index over the same time.

SPLV's ascent to the lofty $4 billion in AUM level is not surprising as investors have embraced low volatility ETFs in significant fashion. Through February 19, investors had poured <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3378741/more-low-vol-etfs-your-broker-forgot-to-mention">$900 million into low volatility ETFs</a>.

PowerShares sponsors four other low volatility ETFs in addition to SPLV. The PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) is home to $128.6 million in assets while the PowerShares S&amp;P International Developed Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/idlv#NYSE">IDLV</a>) has $48.1 million in assets. Both funds debuted in January 2012.

In February, PowerShares introduced the PowerShares S&amp;P MidCap Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/xmlv#NYSE">XMLV</a>) and the PowerShares S&amp;P SmallCap Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/xslv#NYSE">XSLV</a>). Those ETFS have $2.6 million and $5.2 million in AUM, respectively.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

IDLV

XMLV

XSLV

PowerShares Low Volatility ETF Tops $4B in AUM

With all due respect to the world of high fashion, low volatility ETFs are the new black. Inflows of $900 million <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/02/3378741/more-low-vol-etfs-your-broker-forgot-to-mention">from the start of 2013 through February 19 affirm that assertion</a>. 

Alone, the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) now has over $4 billion in assets under management. The iShares MSCI USA Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) and the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) have made their presences felt in the "low vol" ETF arena as well with $1.76 billion and $1.56 in AUM, respectively.

Bottom line: Investors love low volatility ETFs, but what about the high beta equivalents? It is a question worth exploring, particularly if <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">cyclical sectors take on leadership roles and lead the broader market higher</a>.

Investors willing to take on some added beta should consider the following three ETFs, all courtesy of Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit.

PowerShares S&amp;P Emerging Markets High Beta Portfolio (NYSE: <a class="ticker" href="/stock/eehb#NYSE">EEHB</a>)
The PowerShares S&amp;P Emerging Markets High Beta Portfolio can be described as the high beta equivalent of the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>). For its part, EELV got off to a slow start following its January 2012, but has since surpassed the much ballyhooed $100 million in AUM total. The fact that EELV has returned almost 17 percent since inception certainly helps.

EEHB is still a small ETF ($2.3 million in AUM). Part of the reason for that is because as a high beta fund, it can be said that EEHB needs a sanguine environment for emerging markets equities in which to thrive. On a related note, the ETF's country lineup is arguably surprising. An almost 25 percent allocation to China is not unexpected, but South Korea and Taiwan combine for nearly 30 percent of EEHB's weight and those are two markets that are viewed as "lower beta" in the emerging world.

Additionally, EEHB's allocations to Russia (5.5 percent) and India (3.8 percent) are not that large and those are two higher beta emerging markets. There are some things to like with EEHB. An expense ratio of 0.29 percent is decent among emerging markets ETFs. The fund currently has a P/E ratio of 13.75 and a price-to-book ratio of just 0.59, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=EEHB">according to PowerShares data</a>, implying it trades at favorable valuations relative to other diversified emerging markets ETFs.

PowerShares S&amp;P International Developed High Beta Portfolio (NYSE: <a class="ticker" href="/stock/idhb#NYSE">IDHB</a>)
Like EEHB, the PowerShares S&amp;P International Developed High Beta Portfolio has a low volatility cousin in the form of the PowerShares S&amp;P International Developed Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/idlv#NYSE">IDLV</a>). IDHB is the newer of the two, having debuted a month after its low volatility counterpart. And like EELV, IDHB has trailed its low volatility equivalent in terms of attracting assets (IDHB has about 20 percent of the assets IDLV has).

And like EEHB, IDHB surprises at the country level. As high beta developed market play, IDHB could lead investors to think the ETF is heavy on risky markets such as Italy and Spain. In reality, that is not the case.

In fact, IDHB merits consideration because its exposure to some of Europe's higher quality markets is significant. For example, Sweden is the ETF's largest country weight at nearly 15 percent. Germany is third at over 10 percent. Finland, Norway and Canada, all of which have AAA credit ratings, combine for over 16 percent of IDHB's weight. IDHB has a 30-day SEC yield of 2.54 percent and an annual expense ratio of 0.25 percent, which is favorable for an international ETF.

PowerShares S&amp;P 500 High Beta Portfolio (NYSE: <a class="ticker" href="/stock/sphb#NYSE">SPHB</a>)
As was recently noted, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">SPHB is the high beta equivalent of SPLV</a>. Given SPLV's success, comparisons here are hard, but it should be noted SPHB has done pretty well for itself with almost $264 million in AUM.

As SPLV takes the 100 S&amp;P 500 members with lowest trailing-12 month betas, SPHB takes the 100 highest beta names over the same time frame. To that end, it is not surprising that financials account for almost 25.5 percent of the ETF's weight and four financial services stocks are found among SPHB's top-10 holdings. 

Technology is the next largest sector weight at 20.7 percent. SPHB is not excessively levered to any of its holdings as 1.64 percent is the largest weight granted to any of the fund's constituents. Year-to-date, SPHB has impressed with a gain of 10.5 percent, clearly benefiting from U.S. stocks continuing to hover near all-time highs. 

Beyond that, SPHB, which charges 0.25 percent per year, offers investors a way of getting mid-cap exposure with high beta twist because mid-cap value and growth names represent over 60 percent of the ETF's weight.

For more on volatility ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/03/3409959/use-this-etf-for-a-high-beta-resurgence">here</a>.

IDHB

SPHB

3 High Beta ETFs Your Broker Forgot to Mention

Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit, the fourth-largest U.S. ETF sponsor, said Wednesday it will introduce two more low volatility ETFs on Friday, expanding its lineup of such funds to five.

The new PowerShares low volatility offerings will be the PowerShares S&amp;P MidCap Low Volatility Portfolio (NYSE: XMLV) and the PowerShares S&amp;P SmallCap Low Volatility Portfolio (NYSE: XSLV). 

XMLV is based on the S&amp;P MidCap 400 Low Volatility Index, which is designed to measure the performance of 80 of the least volatile stocks from the S&amp;P MidCap 400 Index over the past 12 months, according to PowerShares. 

XSLV is based on the S&amp;P SmallCap 600 Low Volatility Index, which is designed to measure the performance of 120 of the least volatile stocks from the S&amp;P SmallCap 600 Index over the past 12 months, the firm said in a statement.

PowerShares has proven to be one of the leaders among ETF sponsors when it comes to so-called "low vol" funds. The firm introduced the category's dominant ETF in May 2011, the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>), a fund that has already raked in more than $3.3 billion in assets under management.

The PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>), which is just over a year old, has $103 million in assets while the PowerShares S&amp;P International Developed Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/idlv#NYSE">IDLV</a>), also just over a year old, has $34.4 million in AUM.

Since inception on January 13, 2012, both EELV and IDLV have achieved better risk-adjusted returns compared to their respective MSCI benchmarks, according to PowerShares.

Investors continue to embrace low-volatility ETF strategies as a simple and effective way to maintain equity exposure while mitigating overall portfolio risk," said Ben Fulton, Invesco PowerShares managing director of global ETFs, in the statement. "The two new PowerShares ETFs will provide investors with convenient access to low volatility strategies covering the US mid-cap and small-cap segments."

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

PowerShares to Expand Low Volatility ETF Suite

Keeping with a theme that started in earnest last year, investors have continued to put cash to work in low volatility emerging markets ETFs in 2013. Inflows to "low vol" products have continued even as diversified emerging markets ETFs have struggled to start the new year. 

For example, the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) was off three percent heading into the start of trading Tuesday.

Still, those developing markets funds that skimp on volatility have again been outpacing their traditional peers, another trend <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3076528/low-vol-em-etf-continues-to-impress-with-aum-gains">that became evident last year</a>.

Year-to-date, the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>) is off about 1.1 percent, but that is still good enough to best the Vanguard FTSE Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>) and EEM, the two largest emerging markets ETFs by assets.

Impressive is how rapidly EEMV has accumulated assets. In late December 2012, it was noted that it was merely <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3194900/the-top-diversified-em-etfs-for-2013">a matter of time before EEMV joined the $1 billion in AUM club</a>. On December 21, the fund had $817 million in assets and that was up from $600 just a few months prior. 

As of January 28, EEMV had $1.02 billion in assets, <a href="http://us.ishares.com/product_info/fund/overview/EEMV.htm?fundSearch=true&amp;qt=EEMV">according to iShares data</a>. Translation: EEMV has grown its AUM total by 22.3 percent in the span of just five weeks.

The iShares offering is not the only fund residing in the low volatility emerging markets space. Nor is it the only one that is proving to be a prodigious gather of assets. It took the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>) just about a year of trading to cross the much ballyhooed $100 million AUM mark.

For much of 2012, EELV flew under the radar relative to EEMV, but investors started to put cash to work in the former late in the year. By December 12, 2012, EELV had $86.5 million in AUM. The total is now $100 million, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=EELV">according to PowerShares data</a>. Asset growth of 15.6 percent in six weeks is impressive for any ETF, period.

EELV was off about 1.2 percent this year at the start of trading Tuesday and the reasons for that slack performance are easy to spot. The ETF allocates 33.5 percent of its weight to South Africa and Malaysia. South African equities have hampered by labor unrest while Malaysian stocks have tumbled as investors and voters there appear skittish ahead of this year's general election.

Malaysia and South Africa represent just over 15 percent of EEMV's weight. That ETF is dominated by Taiwan and China, which combine for over 29 percent of the fund's weight. 

Notable is the fact that neither ETF is heavy on emerging European issues. EELV features no exposure to that region while Poland, Russia and the Czech Republic combine for less than three percent of EEMV's weight.

For more on diversified emerging markets ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3194900/the-top-diversified-em-etfs-for-2013">here</a>.

Low Vol EM ETFs Continue Raking in Cash

One of the most popular ETFs launched in the past couple years is PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>), and it's not hard to guess why.

After suffering through the dot-com crash and 2008 financial crisis, investors are putting a premium on safety, particularly when dipping their toes into stocks.

In the last five years, investors have pulled $548 billion from U.S. equity mutual funds and plowed more than $1 trillion into taxable fixed-income funds, according to ConverEx Group. However, equity-based ETFs have gathered $330 billion of inflows during the same period.

Recently, a decent chunk of these ETF flows has been earmarked to “safer” funds that employ low-volatility and dividend strategies with indexes.

For example, SPLV has quickly grown to over $3 billion in assets after launching in May 2011. The fund is one of the biggest success stories in ETFs the past few years, and investors can expect more low-volatility funds to hit the market in 2013.

The ETF's tracking index is comprised of the 100 stocks from the S&amp;P 500 with the lowest realized volatility the past year. Volatility is a measure of a security's tendency to jump around in price.

SPLV has been popular because the strategy is relatively easy to explain and understand, and investors want some downside protection when venturing into stocks.

The fund turned in a respectable 2012 with a 10.1% total return but it did trail the S&amp;P 500, which gained 16%, according to Morningstar. “Naturally, with a low-volatility bent, the fund emphasizes defensive sectors such as utilities and consumer staples,” the investment researcher says in a profile of SPLV.

The fund's underperformance relative to the S&amp;P 500 can be attributed partly to the overweight in these two sectors. Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) rose just 1 percent last year, while Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) added 10.7 percent.

SPLV has 31 percent in the utilities sector and 26.8 percent in consumer staples, according to manager Invesco PowerShares.

Low-volatility strategies have historically earned “excellent risk-adjusted returns” but can “perform miserably during furious bear markets,” Morningstar notes.

Now, Invesco PowerShares is readying a pair of funds in an attempt to capitalize on the success of SPLV. According to a recent filing, the firm wants to launch PowerShares S&amp;P 400 Low Volatility Portfolio and PowerShares S&amp;P 600 Low Volatility Portfolio, which would track the mid-cap and small-cap portions of the U.S. stock market, respectively.

Other existing ETFs on the market designed to track low-volatility benchmarks include:

<ul><li>iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>)</li>
<li>iShares MSCI All Country World Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/acwv#NYSE">ACWV</a>)</li> 
<li>iShares MSCI USA Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>)</li>
<li>PowerShares S&amp;P International Developed Low Volatility (NYSE: <a class="ticker" href="/stock/idlv#NYSE">IDLV</a>)</li> 
<li>PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)</li> 
<li>iShares MSCI EAFE Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/efav#NYSE">EFAV</a>)</li>
<li>EGShares Low Volatility Emerging Markets Dividend ETF (NYSE: <a class="ticker" href="/stock/hilo#NYSE">HILO</a>)</li></ul>

ACWV

EFAV

HILO

Low-Volatility ETFs Ready for Next Act

Here is the ETF Professor's ETF Watch List for Friday December 28, 2012.

Commodities play of the day: ETFS Physical Palladium Shares (NYSE: <a class="ticker" href="/stock/pall#NYSE">PALL</a>).

Dividend play of the day: WisdomTree Equity Income Fund (NYSE: <a class="ticker" href="/stock/dhs#NYSE">DHS</a>).

Keep an eye on the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) and the Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>).

Emerging markets plays of the day: Market Vectors Vietnam ETF (NYSE: <a class="ticker" href="/stock/vnm#NYSE">VNM</a>), PowerShares DWA Emerging Markets Technical Leaders ETF (NYSE: <a class="ticker" href="/stock/pie#NYSE">PIE</a>) and the PowerShares S&amp;P Emerging Markets Low Volatility ETF (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>).

Forex play of the day: CurrencyShares Japanese Yen Trust (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>).

Bond play of the day: iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>).

Pre-Market Outlook

PALL

PowerShares DWA Emerging Markets Technical Leaders

ETFs to Watch December 28, 2012 (DHS, LQD, VFH)

In a new blog post, Dodd Kittsley, Head of Global ETP Market Trends Research for BlackRock (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>), identifies four prominent trends the exchange-traded products industry could see in 2013. One of the trends, <a href="http://isharesblog.com/blog/2012/12/26/4-etp-trends-for-2013/">that being double-digit asset growth</a> for the industry at large, is a broader theme. Isolating individual ETFs and ETNs that can benefit from industry-wide asset growth is tricky.

However, the three other trends Kittsley highlights can easily be exploited through individual ETFs. That list starts with...

Robust Interest in Bond Funds
This is an extension of a prominent 2012 theme. As <a href="http://www.benzinga.com/news/12/12/3160109/etf-inflows-on-record-pace-in-2012-says-morningstar">Morningstar noted earlier this month</a>, U.S. bond ETFs hauled in $3.8 billion in inflows in November to bring the year-to-date total through the end of November to $48 billion.

"Bond ETPs account for 31% of all year-to-date industry flows, up from 12% in 2008," said Kittsley.

If a fiscal cliff resolution is not passed before the January 1, 2013 deadline, investors could flee stocks and equity-based ETFs for the comfort of bond funds. The PIMCO Total Return Bond ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>), which has been the most successful new product launch of 2012, has the advantage of being known as the "Bill Gross ETF." That could spark inflows in a turbulent environment for stocks and other risky assets.

Assuming 2013 starts on a risk off note, that could cap upside for high-yield bond funds, but investors' need for yield is not likely to diminish. That could make the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>) attractive. 

Another ETF to consider is the WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>). With over $96.2 million in AUM, EMCB is a successful 2012 ETF launch in its own right. Roughly 70 percent of the fund's holdings are rated investment-grade and the ETF has a 30-day SEC yield of 3.61 percent, 85 basis points higher than LQD's 30-day SEC yield.

Increased Use of Volatility Products
Again, this is an extension <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2805967/the-definitive-guide-to-low-volatility-etfs">of a 2012 theme</a>. Arguably, the volatility ETF movement kicked off in 2011 with the debut of the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). 

SPLV is now the gold standard of volatility ETFs with almost $3.1 billion in assets under management and this ETF's success has sparked a wave of new product introductions aimed at capturing share in a market segment that has proven wildly popular with investors.

Other low volatility ETFs that could see strong inflows in the new year include the PowerShares S&amp;P 500 High Dividend Portfolio (NYSE: <a class="ticker" href="/stock/sphd#NYSE">SPHD</a>), which debuted just two months ago and already has $28 million in AUM. SPHD is home to 50 stocks "traded on the S&amp;P 500 Index that historically have provided high dividend yields and low volatility," <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=SPHD">according to PowerShares</a>. That gives the ETF a 30-day SEC yield of 4.74 percent.

Investors looking to put the "low vol" theme to work for them <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3076528/low-vol-em-etf-continues-to-impress-with-aum-gains">in the emerging markets</a> have choices as well. Given the rapid success of the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>), which has attracted $840 million in AUM in just 14 months of trading, it would not be surprising to see more inflows to this sub-sector of the low vol ETF universe. 

An alternative to EEMV is the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>). EELV debuted in January and spent several months living a fairly anonymous existence. Over the last few months, however, investors have woken up to EELV's story and the fund's AUM total has jumped to $87.4 million.

More Inflows For EM Bond Funds
"In 2012, demand for this class of ETPs doubled to $20 billion. The category now accounts for 6% of the fixed income ETP universe, up from less than 2% going into 2010," according to Kittsley.

Indeed, it feels like hardly a week has passed in 2012 <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/11/3111740/em-bond-etf-sees-amazing-inflows">without news of another emerging markets bond ETF seeing remarkable inflows</a>. Of course, this has sparked the predictable talk a bubble in emerging markets bonds.

Part of the bubble talk revolves around the fact that companies in the developing world issued <a href="http://online.wsj.com/article/BT-CO-20121218-707850.html">$258 billion in corporate debt this year</a>. That is more than double last year's level, according to the Wall Street Journal. The problem with calling that a bubble is that the appetite is there on the part of global investors to absorb new issuance in 2013 a rate similar to what was seen this year. 

The aforementioned WisdomTree Emerging Markets Corporate Bond Fund should benefit from increased appetite for EM corporate debt. Risk takers can consider the Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>), which features dollar-denominated junk bonds from developing world corporate issuers.

Of course, it cannot be forgotten that ETFs tracking emerging markets sovereign debt have longer track records than their corporate counterparts and have been inflow leaders this year. Sovereign debt issuance in the developing world has also been high this year at $85 billion, but that has not been the primary reason investors have embraced this asset class.

The biggest reason why inflows to dollar-denominated ETFs such as the PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>) have been so robust is yield. PCY offers a 30-day SEC yield of 3.92 percent with the comfort of a dollar-based asset and the potential for capital appreciation as more developing nations see their sovereign ratings boosted.

Not to be left out of the equation are ETFs that give investors exposure to bonds denominated in local currencies. This group includes the Market Vectors Emerging Markets Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>), the iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) and the actively managed WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>).

Local currency debt accounted for 85 percent of the total emerging markets bond market in 2011, <a href="http://www.ft.com/intl/cms/s/0/56cb690e-c6a8-11e1-963a-00144feabdc0.html#axzz2GHTHV0sG">according to the Financial Times</a> and investor interest in local currency bonds continues to increase as some developing nations sport better balance sheets than their developed world counterparts.

Local currency bond ETFs have also held up well in the face of the fiscal cliff. Led by EMLC's 2.33 percent gain, all three of the local currency bond funds mentioned here are up since November 7.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Bonds

BOND

EMCB

Market Vectors Emerging Markets Local Currency Bond ETF