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Latin America Steering To The Right: From Colombia To Brazil, Things Are Changing Fast

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Anyone paying even the slightest attention to Latin America knows that the region has been experiencing a shift away from left-wing governments toward center-right-wing ones &mdash; which are considered full-blown right-wing down there. Left-wing presidents in Argentina, Brazil and Peru have been replaced by market-friendly, right-wing figures in less than a year's time.
However, the turn did not end with the replacement of left-wing governments. In fact, policy adjustments seem to have just started. Last weekend was a particularly hard one for leftist movements, as Colombians voted against its (still left-wing) president&rsquo;s proposed peace agreement that would have ended a 52-year-long war with the FARC (the last Marxist guerilla group standing in the region), and the PT (Workers Party, leftist) delivered a very poor performance in the Brazilian municipal elections.
<h3>Steering The Wheel</h3>
In a recent New York Times <a href="http://www.nytimes.com/2016/10/04/world/americas/latin-america-colombia-brazil.html?_r=0">article</a>, Simon Romero attributed this shift to the right to several factors. &ldquo;The sharp drop in commodities prices has eroded economic growth around Latin America and the support leftist governments once drew from it. The clout of evangelical Christian megachurches is expanding, and they are confronting socially liberal policies and channeling widespread dissatisfaction with the status quo.
&ldquo;But in one country after another, the results are the same: Leaders embracing market-friendly policies are eclipsing the leftists who exerted sway around the Americas in the previous decade.&rdquo;
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8506415/exclusive-leading-latin-american-economist-shares-insights-on" title="Exclusive: Leading Latin American Economist Shares Insights On Politics, Bonds, Mining &amp; Stocks">Exclusive: Leading Latin American Economist Shares Insights On Politics, Bonds, Mining &amp; Stocks</a></bzrelatedlink>
However the trend is framed, the reality is that the region has been witnessing such oscillations for decades now. Left- and right-wing governments alternate in power every 10 to 12 years. Check out Guillermo O&rsquo;Donnell&rsquo;s books for a more developed explanation of the phenomenon.
<h3>This Weekend</h3>
The turn toward the right in Latin America has been widely discussed. But, what happened this weekend? Why did Colombians reject a peace treaty? Why did Brazilians vote against the leaders they loved not long ago?
In Colombia, people believed the deal proposed by President Juan Manuel Santos was too lenient on the FARC, as it allowed most of its members to walk. However, the vote against the president can be read under the lens of a wider trend of defying the status quo, prevalent in Latin America, specialist Michael Shifter explained. For more detailed views of the event, check out these <a href="http://www.thedailybeast.com/articles/2016/10/05/why-colombia-voted-down-peace.html">Daily Beast</a> and <a href="https://www.theguardian.com/commentisfree/2016/oct/03/why-colombians-voted-against-peace-farc-president-santos-better-deal">The Guardian</a> articles.
In Brazil, people turned toward the right after former president Dilma Rousseff was impeached on the back of allegations of mis-handling of public funds. For further information on the issue, check out this article illustrating <a href="http://www.latimes.com/world/mexico-americas/la-fg-brazil-change-since-impeachment-snap-story.html">4 ways Brazil has changed since former President Dilma Rousseff was impeached.</a>
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
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	Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

One month into the new year and the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) has been unable to shake its laggard status established in 2012. 

Last year, the $9.27 billion EWZ was the worst performer among the four major ETFs tracking the BRIC nations. A late year rally helped EWZ close 2012 in the green but a gain about half a percent was not even close to the 15 percent offered by the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>), the next-closest BRIC ETF in terms of performance.

EWZ is up to its old tricks again as the ETF headed into the start of trading today with a year-to-date loss of about 0.7 percent. The iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) and RSX are down on the year, though not as much as EWZ, and the WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>) has notched a modest year-to-date gain.

Perhaps highlighting the lack of faith some investors have in EWZ, the ETF is off 0.35 percent Thursday and that is after Brazil's government statistics agency IBGE said the unemployment rate in Latin America's largest economy fell to 4.6 percent in December from 4.9 percent in November. That missed estimates of 4.4 percent, but a 4.6 jobless rate is still stellar in the developed and developing worlds.

The U.S. unemployment rate is 7.8 percent. Egypt's is around 12 percent. Both Spain and South Africa have jobless rates north of 20 percent.

As EWZ has struggled this year, a <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3132834/as-dalio-dances-dangerously-with-brazil-chanos-smiles">familiar culprit has emerged as the reason why</a>. That culprit is Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>), Brazil's state-run oil company.

Including Thursday's loss of about two percent, Petrobras is continuing a disturbing trend of its own. That being wearing the dubious title of one of the world's worst oil equities. Shares of Petrobras trading in New York are down 7.3 percent year-to-date, including Thursday's. Trading around $18.20 at the time of this writing, Petrobras is less than a $1 above its 52-week low at $17.27. 

That sad performance really stands out among integrated oil companies because Colombia's Ecopetrol (NYSE: <a class="ticker" href="/stock/ec#NYSE">EC</a>), that country's state-controlled oil firm, BP (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>), Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) have all delivered solid-year to date performances.

While Petrobras's market value has dwindled, so has its weight in EWZ. In early November, the two Petrobras securities found in EWZ <a href="http://www.benzinga.com/news/earnings/12/11/3048338/ewz-fighting-off-petrobras-woes">combined for over 16 percent of the ETF's weight</a>. That figure was down to 13 percent as of Wednesday, but that does not change the fact that Petrobras is still EWZ's largest holding.

Petrobras has come under pressure this week after the company announced it will raise gasoline and diesel prices by 6.6 and 5.4 percent, respectively. Analysts were hoping for higher increases. Being controlled by the Brazilian government means Petrobras does not have the freedom to raise prices in an effort to take advantage of rising oil futures. Brazil has strict fuel price controls aimed at controlling inflation there.

That may be good for Brazilian drivers, but those price controls <a href="http://www.bloomberg.com/news/2013-01-29/petrobras-approved-to-raise-wholesale-gasoline-prices.html">forced Petrobras into reporting its first quarterly loss in 13 years</a> in the second quarter of 2012, Bloomberg reported. Now Petrobras has a market cap of just under $119 billion, meaning it is about $11 billion smaller than Ecopetrol based on that metric.

Bottom line: Petrobras, and by virtue, EWZ are again reminding ETF investors that the biggest fund is not always the best way of accessing Brazil. For example, the Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) has posted a modest year-to-date gain and as small-cap ETF, BRF has no exposure to Petrobras. 

Those willing to take a look at a smaller, thinly traded ETF can consider the First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>). FBZ is up about 1.5 percent year-to-date and allocates just 1.86 percent of its weight to Petrobras.

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

Exchange traded funds focusing on global markets, developed and emerging markets, often share something in common with their U.S. broad market and sector products. That being a dependence on cap-weighting methodology or the allocation of the largest stocks by market value at the top of the fund and the smallest names at the bottom.

This scenario is seen time and time again with ETFs ranging from the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) to the SPDR STOXX Europe 50 ETF (NYSE: <a class="ticker" href="/stock/feu#NYSE">FEU</a>). EWZ is dominated by Brazilian large-caps such as Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>) while familiar names such as Nestle (OTCBB: NSRGY), BP (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>) and Royal Dutch Shell (NYSE: RDS-A) dot FEU's top-10 holdings.

Arguably the primary risk with cap-weighting methodology is that in the wrong environment or when particular stocks fall out of favor, an ETF's heavy exposure to a small amount of stocks diminishes one of the major reasons for owning ETFs in the first place. That reason being diversification.

First Trust, the Illinois-based ETF sponsor behind the AlphaDEX suite of funds, has shown a different approach to <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2971334/alphadex-etfs-do-things-differently-with-stellar-results">sector funds</a> not only provides with more choices, it can generate superior returns. The same can be said when it comes to global funds.

"The largest mega-caps don't outperform over time," said First Trust ETF Strategist and Senior Vice President Ryan Issakainen in an interview with Benzinga from the Morningstar ETF Conference in Chicago that the AlphaDEX funds. "The law of large numbers says it can't happen."

The AlphaDEX funds do not eschew the largest, most familiar stocks. Rather, ETFs such as the First Trust Energy AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxn#NYSE">FXN</a>) allocate less weight to stocks with the largest market values. In the example of FXN, Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) and Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) combine for less than five percent of that fund's weight. That compares with those two stocks representing almost 37 percent of the Vanguard Energy ETF (NYSE: <a class="ticker" href="/stock/vde#NYSE">VDE</a>). 

What is important to note is that AlphaDEX sector funds have shown a tendency to outperform traditionally weighted ETFs. That provides the impetus for probing the performance of AlphaDEX country and global funds against larger ETFs.

"The same applies to individual countries," Issakainen said. "Look at Brazil. It is very concentrated in the largest stocks. If Petrobras is the best performer we're (First Trust) going to have a hard time outperforming, but generally, that is not the case."

The example of Brazil is relevant. The struggles of Petrobras, Brazil's state-run oil giant, have plagued the iShares MSCI Brazil Index Fund this year. That ETF is off 5.4 percent year-to-date. Two different Petrobras securities account for over 17 percent of EWZ's weight. On the other hand, the First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) allocates less than 3.2 percent of its weight to Petrobras and that fund is slightly positive on the year. FBZ debuted in April 2011 and has attracted $5.7 million in AUM.

Brazil is not the only example. The First Trust China AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fca#NYSE">FCA</a>) has outperformed the SPDR S&amp;P China ETF (NYSE: <a class="ticker" href="/stock/gxc#NYSE">GXC</a>) by nearly 100 basis points this year. The First Trust United Kingdom AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fku#NYSE">FKU</a>) has topped the iShares MSCI United Kingdom Index Fund (NYSE: <a class="ticker" href="/stock/ewu#NYSE">EWU</a>).

Even with those superlatives, the AlphaDEX country funds have yet to attract assets on part with direct rivals or the AlphaDEX sector funds. FKU has almost $6.5 million in AUM after debuting in February. FCA has just $3.1 million in AUM after launching in April 2011. 

Issakainen notes that many of the AlphaDEX country funds currently have AUM totals that resemble where the sector funds were at similar points in their life spans. Today, all nine of the AlphaDEX sector funds have over $100 million in AUM.

"Our approach is unique,"Issakainen said. "We have a long-term business we're buildings and don't launch products hap-hazardly." 

First Trust, which has never closed an ETF, now issues 39 AlphaDEX ETFs.

For more on AlphaDEX ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2971334/alphadex-etfs-do-things-differently-with-stellar-results">here</a>.

The iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), the largest ETF tracking Latin America's largest economy, and other Brazil-specific funds have had a rough go in 2012. Rather than taking on direct Brazil risk, investors could have gotten some exposure to the country with the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), earning a year-to-date return of almost 12.1 percent. EWZ is off 1.7 percent year-to-date.

Myriad problems, including but not limited to slowing growth, a plunging real, weakness in state-controlled oil giant Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and a <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/04/2472879/playing-politics-bad-news-for-brazil-ewz">political environment that gives foreign investors pause</a> have all plagued EWZ and related ETFs.

There is good news, that being EWZ and friends have notched impressive rallies as of late. EWZ is up almost three percent in the past month while the Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) has surged 6.8 percent over the same time. 

Investors are responding. EWZ has attracted more than $600 million in net inflows in the past week, according to a note from StreetOne Financial published on Friday. StreetOne points out that EWZ is nearing its 200-day moving average, a significant technical area for the fund because some technical analysts believe a security is in a bear market until it rises above the 200-day line. EWZ is 2.2 percent away from its 200-day simple moving average.

Speaking of technicals, EWZ made an important stand around $50 late in the second quarter. Had the fund languished below that level for too long, <a href="http://www.benzinga.com/media/barrons/12/06/2697237/below-50-problems-await-brazil-etf-ewz">selling pressure would have likely intensified</a>. Instead, the dip below $50 was bought and EWZ has jumped 10.2 percent since June 22.

Despite the recent bullishness in some Brazil-specific ETFs, investors need to be highly selective with these funds. For example, playing <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2839282/will-the-government-jolt-the-brazil-infrastructure-etf">Brazilian infrastructure would have seemed like a smart bet in August</a>. Last month, the country announced a $66 billion infrastructure stimulus program, but the EGShares Brazil Infrastructure ETF (NYSE: <a class="ticker" href="/stock/brxx#NYSE">BRXX</a>) has been one of the worst-performing Brazil ETFs since that announcement. BRXX is down 4.5 percent in the past month.

Even one <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2835946/is-a-bridgewater-bottom-in-for-ewz">hedge fund legend</a> has yet to strike gold with EWZ. Not only has BRF recently outperformed EWZ, so has the thinly traded Global X Brazil Financials ETF (NYSE: <a class="ticker" href="/stock/braf#NYSE">BRAF</a>).

However, each member of the BRAF, BRF and EWZ trio have outpaced the Global X Brazil Mid Cap ETF (NYSE: <a class="ticker" href="/stock/braz#NYSE">BRAZ</a>), the Global X Brazil Consumer ETF (NYSE: <a class="ticker" href="/stock/braq#NYSE">BRAQ</a>) and the First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) in the past month.

In defense of BRAF, the fund has surged almost 16 percent in the past three months and reclaimed its 200-day line in early August. Bolstering the technical outlook for BRAF is the fact that the fund <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/09/2896966/more-golden-cross-etfs">recently experienced the alluring golden cross</a>.

Investors face decisions when it comes to Brazil ETFs. While EWZ will remain the bellwether fund for this country and inflows to the ETF are a positive sign, those looking for pure performance should consider other Brazilian opportunities in addition to EWZ.

For more on Latin America ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/09/2889368/chile-not-just-a-copper-play">here</a>.

Sector ETFs

Technicals

BRAF

BRAQ

BRAZ

Emerging Global Shares INDXX Brazil Infrastructure Index Fund

BRXX

A Brazilian Bounce For These ETFs

The iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), the largest ETF tracking Latin Amercia's largest economy, is trading modestly higher today after it was revealed Ray Dalio's Bridgewater Associates took a stake in the controversial ETF during the second quarter. 

Bridgewater bought just over 2 million shares of EWZ <a href="http://emergingmoney.com/brazil/hedge-fund-ray-dalio-brazil-etf-ewz/">at an average price of $56</a> during the quarter. In other words, EWZ -- assuming Bridgewater still owns it -- accounts for a scant percentage of the hedge fund's $120 billion in assets under management.

Several things are curious about Bridgewater's move into EWZ. For starters, Brazil's <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/04/2472879/playing-politics-bad-news-for-brazil-ewz">political environment indicates the country has overt socialist tendencies</a> and that the country is not always hospitable to Western business interests. 

Second, Bridgewater's EWZ investment is arguably an indirect endorsement of Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and, to a lesser extent, Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>). Both loom large in EWZ, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/05/2585937/problematic-petrobras-plaguing-brazil-etfs">which has been a problem for the ETF this year</a>. The cold reality is Petrobras has been one of the worst-performing major oil stocks in the world for not just one year, but for two years. 

How bad has Petrobras been? Since the Gulf of Mexico oil spill in 2010, BP (NYSE: <a class="ticker" href="/stock/bp#NYSE">BP</a>) has outpaced Petrobras. Petrobras securities account for about 16 percent of EWZ's weight.

Third, EWZ is nowhere close to being the top-performing Latin American ETF this year. Comparable funds tracking Chile, Colombia, Mexico and Peru have all outperformed EWZ year-to-date. In fact, EWZ is the only one that is negative on the year. Not to mention, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/06/2684731/colombia-compelling-country-compelling-valuation-and-ec-">Chile and Colombia are believed to have superior political environments to Brazil</a>. 

Fourth, Brazil is not where the momentum lies in Latin America. At least not at the moment. Mexico is arguably the momentum play of the region. The performance of the iShares MSCI Mexico Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eww#NYSE">EWW</a>) indicates as much and it is possible that <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/08/2822061/mobius-chimes-in-on-mexico">Mexico will surpass Brazil</a> for the top spot among LatAm economies in the coming years.

Fifth, Dalio has acknowledged that a large part of the reason for the global economic slowdown is China's sluggish growth. That makes sense as China is the world's second-largest economy. China is also a prime destination for Brazilian exports, indicating that if China's economy remains fragile, chances are Brazil's will as well. 

Finally, EWZ is not even the best of the Brazil ETF bunch regarding year-to-date performance. The smaller and thinly traded The First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) has outpaced EWZ by more than 300 basis points this year. 

Of course, arguing against Dalio's track record is foolhardy. Bridgewater did not accumulate $120 billion in AUM by making a lot of mistakes. Maybe it can be argued that news of the Bridgewater investment is a sign that the darkest clouds have already passed embattled EWZ. If nothing else, the headlines are probably the best EWZ has been on the receiving end of in 2012.

For more on Latin America and ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/08/2822061/mobius-chimes-in-on-mexico">here</a>.

Hedge Funds

Movers & Shakers

Is a Bridgewater Bottom in For EWZ?

Since the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) came to market in 1993, one of the calling cards of the exchange-traded products industry has been costs. Costs associated with most ETFs easily trump those of mutual funds and those differences in expense ratios mean big differences over time in terms of returns to investors.

Last year, mutual fund investors <a href="http://www.benzinga.com/news/12/04/2520180/etf-opinion-dont-be-impressed-by-falling-mutual-fund-fees">paid an average of 0.75 percent in expenses</a>. It is hard to envision the ETF business being able to survive let alone rival mutual funds if the average ETF cost 75 basis points per year. 

The reality is low fees are the backbone of how many ETF providers attract assets. It is low fees that explain the rapid ascent of Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) up the ETF ladder and it is low fees that explain why Vanguard is one of the truly dominant U.S. ETF sponsors. 

In most cases, Vanguard's fees undercut rivals on similar funds. That strategy has allowed the company to amass over $208 billion in ETF assets as of the end of June and highlights why <a href="http://www.benzinga.com/news/12/04/2520180/etf-opinion-dont-be-impressed-by-falling-mutual-fund-fees">some rivals are worried about Vanguard's stunning growth in the ETF business</a>.

A prime example of Vanguard's ability to stick it to rivals when it comes to costs is the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>). Once upon a time, VWO had what was perhaps the ETF world's best rivalry going with the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>). That rivalry perished quickly because investors realized the two funds essentially do the same thing, but VWO charges just 0.2 percent per year compared to the 0.67 percent charged by EEM. 

The result: VWO had almost $64 billion in AUM at the end of June. EEM has $34.1 billion in AUM. The VWO/EEM rivalry serves as a reminder that if two ETFs do almost exactly the same thing, broadly speaking, it is advantageous for long-term investors to opt for the fund with the lower fees. However, there are some noteworthy examples in the ETF universe where cheaper is not always better.

In the following examples, the more expensive ETF with the better performance is in bold.

Vanguard Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/vcr#NYSE">VCR</a>)
By a small margin, the Vanguard Consumer Discretionary ETF is more expensive than the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>). XLY charges just 0.18 percent year while VCR charges 0.19 percent. 

Regarding performance, the comparison is not completely apples-to-apples because VCR is currently home to 373 stocks while XLY holds just 83. In terms of AUM, XLY is almost six times larger than its Vanguard rival. Superficial statistics aside, performance is where these two ETFs really diverge. Over the past five years, XLY is up 12 percent. That is fine, but unimpressive when compared a 17.4 percent jump for VCR.

iShares High Dividend Equity Fund (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)
When measured against the Vanguard Dividend Appreciation ETF (NYSE: <a class="ticker" href="/stock/vig#NYSE">VIG</a>), the largest of all dividend ETFs, the iShares High Dividend Equity Fund does look expensive with annual fees of 0.4 percent compared to 0.13 percent for VIG. VIG is also far larger in terms of holdings with 133 compared to 75 for HDV.

The ETFs do not track the same index and that fact may mute this comparison to a certain extent. That said, both are dividend ETFs, but in the past year, HDV has shown it is worth paying up for. While VIG is up 7.8 percent, HDV has jumped 20.4 percent. HDV also has the higher yield.

First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>)
The First Trust Brazil AlphaDEX Fund charges 0.8 percent per year, which is more than 20 basis points higher than the fees on the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>). And with $5.6 million in AUM, FBZ is merely a barnacle on the $7.5 billion whale that is EWZ. 

Still, FBZ offers a big advantage over EWZ and that is that the former tracks a different index. That means FBZ does not feature excessive weights to Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), two beaten up Brazilian commodities giants. Neither ETF has been great this year, but FBZ's loss of 5.4 percent is better than EWZ's seven percent slide.

For more on ETF fees, click <a href="http://www.benzinga.com/news/12/04/2520180/etf-opinion-dont-be-impressed-by-falling-mutual-fund-fees">here</a>.

Broad U.S. Equity ETFs

Currency ETFs

SCHW

Select Sector SPDR-Consumer Discretionary

When Cheaper Is Not Better With ETFs

Average daily volume is arguably a superficial statistic, but for many traders and investors, it remains an important way of quantifying the quality of some ETFs. Research shows liquidity is not as much of a concern as some have made it out to be with ETFs. In fact, research indicates <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/07/2740931/etf-liquidity-thinly-traded-etfs-are-not-so-bad">select thinly traded ETFs focused on U.S. equities outperform more heavily traded equivalents</a>.

Actually, it is easier than some might expect to find lightly traded ETFs across myriad sectors that are <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/07/2742958/low-volume-high-returns-for-these-etfs-bib-fhc-drw">generating returns superior to the more heavily traded funds</a>. 

This scenario plays out frequently in the emerging markets universe, one result of the rising number of emerging markets funds available to investors.

Even with the increased number of emerging markets funds on the market, the usual suspects still control the bulk of the assets under management and average daily volume for this asset class. In this case, "usual suspects" means ETFs such as the Vanguard MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/vwo#NYSE">VWO</a>), the iShares MSCI Emerging Markets Index Fund (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>) and the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>), just to name three. 

Here are some thinly traded emerging markets ETFs that are generating superior alpha compared to their more popular counterparts.

iShares FTSE China (HK Listed) Index Fund (NASDAQ: <a class="ticker" href="/stock/fchi#NASDAQ">FCHI</a>)Compare the holdings and the weights of the largest holdings of the iShares FTSE China (HK Listed) Index Fund against iShares FTSE China 25 Index Fund and <a href="http://us.ishares.com/product_info/fund/overview/FXI.htm?fundSearch=true&amp;qt=FXI">it is easy to see the differences are, for the most part, slight</a>. 

However, FCHI holds 121 stocks compared to just 26 for FXI. Both ETFs charge 0.72 percent per year, but FCHI's focus on Hong Kong-listed shares has proven beneficial to investors. In the past year, year-to-date and in the past 90 days, FCHI has soundly outperformed FXI. That is despite the fact that FXI has over $4.4 billion in AUM compared to just $28.3 million for FCHI. FCHI's average daily volume is 2,740 shares. An average day for FXI sees more than 18.2 million shares change hands.

First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>)
Most investors that have played Brazil via ETFs know about the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>). Home to $7.2 billion in AUM, EWZ is not only far and away the largest ETF tracking Brazil, it is one of the largest country-specific funds tracking any country. Period.

In a prime example of bigger is not always better, FBZ, with all of $6.48 million in AUM, has outperformed EWZ over the past year, year-to-date and in the past 90 days. FBZ seems to be benefiting from lower weights to Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), two marquee Brazilian resources names that have plagued EWZ. Barely more than 4,100 shares changes hands per day in FBZ compared to almost 18 million in EWZ.

PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>)
The PowerShares S&amp;P Emerging Markets Low Volatility Portfolio, which debuted in January, is a direct rival to the iShares MSCI Emerging Markets Minimum Volatility Index Fund. However, while it may appear the two funds do exactly the same thing, that is offering emerging markets exposure with a low volatility twist, there are significant differences between the two.

For starters, the iShares offering has over $215 million in AUM and ADV of 83,000 shares. EELV has just $5.2 million in AUM and ADV of less than 5,300 shares. EELV's diminutive stature might lead some to ignore the ETF, but based on performance, that should not be happening. Year-to-date, the PowerShares offering is the winner and over the past three months, the performance gap grows to 215 basis points.

SPDR S&amp;P Emerging Latin America ETF (NYSE: <a class="ticker" href="/stock/gml#NYSE">GML</a>)
It has been a rough year for many ETFs tracking Latin America, particularly those with heavy weights to Brazil, but the SPDR S&amp;P Emerging Latin America ETF has at least one point in its favor. The ETF has outpaced the iShares S&amp;P Latin America 40 Index Fund on a year-to-date basis. 

This rivalry is another case of two ETFs that appear to do the same thing, but because the funds track different indexes, the performances significantly diverge. GML and ILF are home to many of the same marquee Latin America stocks, but with different weightings. That leaders to the performance gap over most relevant time frames. Year-to-date and in the past month, GML is the winner, but over the past 90 days, ILF has been the better option.

With over $1.6 billion in AUM, ILF has ADV of almost 931,000 shares. By comparison, GML has almost $110 million in AUM and ADV of less than 14,000 shares. 

For more on obscure international ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2690918/3-etfs-for-brazils-stimulus-braq-brxx-fbz">here</a>.

EELV

FCHI

4 Thinly Traded EM ETFs Outpacing More Popular Rivals

In a familiar approach seen in the U.S. and China, Brazil is employing stimulus measures to boost its sagging economy. The largest Latin American economy reported first-quarter GDP growth of just 0.2 percent, hardly on par with what investors expect from an emerging market and well below the 0.5 percent growth economists expected.

President Dilma Rousseff has rolled out an array of stimulus projects aimed at suppressing Brazilian unemployment (already low at 5.8 percent), moves that have her approval rating resting near 60 percent despite the country's economic slowdown, <a href="http://www.nytimes.com/2012/06/22/world/americas/brazil-combats-slowdown-with-even-more-stimulus.html?pagewanted=all">according to the New York Times</a>.

To this point, Brazil's stimulus measures have yet to bare fruit for investors in ETFs such as the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>). The largest Brazil ETF by assets, EWZ has tumbled 11.4 year-to-date and 22.3 in the past 90 days. Increasing concerns about an economic hard landing in China, Brazil's largest trading partner, coupled with the slack performance of state-run oil giant Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2688682/get-acquainted-with-these-bearish-em-etfs-now-bzq-indz-russ">have plagued EWZ</a>.

Given EWZ's exposure to Brazil's commodities-driven export story, investors should consider more domestically focused funds as a way of potentially benefiting from the country's stimulus plans.

EGShares Brazil Infrastructure ETF (NYSE: <a class="ticker" href="/stock/brxx#NYSE">BRXX</a>)
Much has been made about global infrastructure spending. In 2011, a Bank of America Merrill Lynch report fanned the flames of this investment thesis by saying <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/11/2126235/five-infrastructure-etfs-your-broker-forgot-to-mention">select emerging markets would spend up to $6 trillion on infrastructure projects over the next three years</a>.

Brazil should be among the nations spending heavily on infrastructure in the coming years. BRXX is widely viewed as a play on Brazil hosting the 2014 World Cup and the 2016 Summer Olympics, but there's more. As the New York Times reported, so many Brazilian infrastructure projects have been approved at the same time, that just a fifth of the $7 billion budgeted for highway projects in 2012 has been spent.

Global X Brazil Consumer ETF (NYSE: <a class="ticker" href="/stock/braq#NYSE">BRAQ</a>)
While economic growth is cooling in Brazil, it is worth noting that consumer-related deal-making <a href="http://www.businessweek.com/news/2012-05-29/btg-adds-to-2-dot-3-billion-bet-on-retail-demand-corporate-brazil">is flourishing, indicating companies are betting on a resurgent Brazilian consumer</a>. Incomes are rising and interest rates are low, two fundamental factors that support a bullish outlook on the Brazilian consumer and BRAQ.

There is a bear case, though. Amid access to easy credit, the Brazilian consumer has already spent. Now he/she is looking at elevated personal debt and is paring spending to reduce that debt burden.

First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>)
The First Trust Brazil AlphaDEX Fund debuted last April as a potential rival to EWZ. That rivalry has yet to materialize, but it should because FBZ's weighting methodology and the <a href="http://www.ftportfolios.com/retail/ETF/ETFsummary.aspx?Ticker=FBZ">index it tracks have generated superior performance</a>.

The biggest risk with FBZ is a 22.2 weight to materials stocks, but on the upside, Petrobras is not nearly as prominent in FBZ as it is in EWZ. In addition, FBZ is 44 percent allocated to more the conservative consumer staples and utilities sectors. Year-to-date, FBZ has outperformed EWZ by 500 basis points.

For more on Brazil ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/05/2585937/problematic-petrobras-plaguing-brazil-etfs">here</a>.

Economics

3 ETFs for Brazil's Stimulus (BRAQ, BRXX, FBZ)

Diversity matters, but before emotions get charged up, let's be careful to note we're not talking about the politically sensitive type of diversity in this piece. We're talking ETF diversity, or in some cases, lack thereof. 

Some ETFs are heavily exposed to a small number of stocks, in some cases one or two stocks dominate an entire ETF. That's not always a <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/03/2447308/cheap-slice-of-apple-pie-these-etfs-have-it-aapl-ixn-qqqv">bad thing depending on the stock</a> but it's not always a guarantee of great returns either. 

The statistics highlight the fact that when it comes to ETFs, there is something to be said for a more balanced approach. That certainly explains why since 2003 the Rydex S&amp;P 500 Equal-Weight ETF (NYSE: <a class="ticker" href="/stock/rsp#NYSE">RSP</a>) has almost doubled while the S&amp;P 500 SPDR (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) is up "just" 50%.

Here are some more ETFs with heavy concentrations to just a couple of stocks that are being outperformed by more diverse equivalents.

iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>)
The appearance of the iShares MSCI Brazil Index Fund on this list is no surprise because nearly everyone that knows anything about this ETF knows it's anything but diverse. Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>), Brazil's state-run oil producer, and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), the world's largest iron producer, combine for 30.3% of EWZ's weight.

That's all fine and dandy when those stocks are performing well. Problem is over the past year and two years, Petrobras has been a stinker. The unheralded First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) has been outpacing EWZ this year and a large part of the reason why is because no single stock accounts for more than 3.77% of FBZ's weight.

Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>)
The Energy Select Sector SPDR is a great example of bigger not always being better when it comes to ETFs. It's also a great example of an ETF where the returns really lag those of an almost equal-weight counterpart. In this case that ETF is the SPDR S&amp;P Oil &amp; Gas Exploration &amp; Production ETF (NYSE: <a class="ticker" href="/stock/xop#NYSE">XOP</a>). 

While Exxon Mobil (NYSE: <a class="ticker" href="/stock/xom#NYSE">XOM</a>) and Chevron (NYSE: <a class="ticker" href="/stock/cvx#NYSE">CVX</a>) combine for almost a third of XLE's weight, XOP's holdings range in weights from 0.73% to 1.63%. XOP is up almost 10% year-to-date while XLE is up just 4%. Go figure.

Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>)
Procter &amp; Gamble (NYSE: <a class="ticker" href="/stock/pg#NYSE">PG</a>) and Philip Morris (NYSE: <a class="ticker" href="/stock/pm#NYSE">PM</a>) account for over 25% of XLP's weight, though that's not necessarily a complaint as the ETF has been a steady performer in 2012. 

To this point, we've examined the performance of ETFs over shorter time horizons, but when it coms to staples stocks and ETFs, it's reasonable to assume these products are held for longer time frames by conservative investors. To that end, the Guggenheim S&amp;P Equal Weight Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/rhs#NYSE">RHS</a>) has outperformed XLP over the past two years and five years, though XLP is slightly ahead in 2012.

Market Vectors Semiconductor ETF (NYSE: <a class="ticker" href="/stock/smh#NYSE">SMH</a>)
Kudos to the Market Vectors Semiconductor ETF for being up 15% year-to-date at the start of trading today, a performance that is even better than Intel's (Nasdaq: <a class="ticker" href="/stock/intc#Nasdaq">INTC</a>) and Intel accounts for 20% of SMH's weight. Throw in Taiwan Semiconductor (NYSE: <a class="ticker" href="/stock/tsm#NYSE">TSM</a>) at 12.6%, and we've got almost a third of SMH's weight allocated to just two stocks.

No single stock receives an allocation of more than 2.49% in the SPDR S&amp;P Semiconductor ETF (NYSE: <a class="ticker" href="/stock/xsd#NYSE">XSD</a>), a fund that has slightly outperformed SMH year-to-date.

Tech

INTC

Rydex ETF Trust Rydex S&P Equal Weightnsumer Staples ETF

Rydex ETF Trust Rydex S&P Equal Weight ETF

Diversity Matters...With ETFs (EWZ, XLP, SMH)

A while back, we scoured the universe of exchange traded funds offering exposure to Latin America to find some <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/05/1116087/four-latin-america-etfs-your-broker-forgot-to-tell-you-about">unheralded but potentially lucrative plays</a>.

That list had a couple of Brazil-heavy funds and a couple of ex-Brazil plays. All experienced their share of struggles last year and all have looked pretty sporty this year. Our previous quartet of unheralded LatAm plays is as follows: The Global X FTSE Argentina 20 ETF (NYSE: <a class="ticker" href="/stock/argt#NYSE">ARGT</a>), the iShares MSCI Brazil Small Cap Index Fund (NYSE: <a class="ticker" href="/stock/ewzs#NYSE">EWZS</a>), the SPDR S&amp;P Emerging Latin America ETF (NYSE: <a class="ticker" href="/stock/gml#NYSE">GML</a>) and the Global X Andean FTSE 40 ETF (NYSE: <a class="ticker" href="/stock/and#NYSE">AND</a>), which was recently <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2360945/checking-in-south-america-ex-brazil-and-gxg-epu">touted here</a>.

Today, we're again hunting for funds that offer LatAm exposure beyond Brazil, but we're making an exception in one case. 

First Trust AlphaDEX Brazil Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>)
Ah, if it wasn't for that pesky <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2356469/10-etfs-that-should-lower-their-expense-ratios">expense ratio</a>. Then we could get really excited about FBZ, easily one of the most unheralded Brazil-specific ETFs on the market. A familiar reason to give FBZ a look still lingers: Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>). As in Petrobras can be a pain in the neck for investors compared to other integrated oil names. Brazil's state-run oil producer accounts for less than 3.4% of FBZ's weight.

FBZ still has room to run to its 52-week high. It just needs the volume to come in to support that move.

iShares MSCI Emerging Markets Latin America Index Fund (Nasdaq: EEML)
No matter how addicted one is to ETFs, keeping up with the dizzying pace of <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2310295/more-me-too-etfs-from-ishares-debut-today">new product introductions</a> from iShares this year has been a daunting task.

Sort of lost in the shuffle has been the iShares MSCI Emerging Markets Latin America Index Fund, which at first glance, looks a lot like the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) given the new ETF's heavy weights to Petrobras and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>). EEML debuted on January 18th and has raked in over $5 million in AUM since then. However, the fund also shares a lot in common with the iShares S&amp;P Latin America 40 Index Fund (NYSE: <a class="ticker" href="/stock/ilf#NYSE">ILF</a>). That is to say don't own EEML and ILF at the same time.

First Trust Latin America AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fln#NYSE">FLN</a>) 
We're going out on a limb and saying that the competition between ILF and the First Trust Latin America AlphaDEX Fund should be far more intense. Yes, FLN's expense ratio of 0.8% makes it a lot pricier than ILF. Both funds are heavy on Brazil and Mexico, but by assets, ILF is 75 times larger than FLN. That shouldn't always be the deciding factor. After all, FNL is up was up more than 20% year-to-date at the start of trading today compared to a gain of less than 15% for ILF.

EGShares Utilities GEMS (NYSE: <a class="ticker" href="/stock/ugem#NYSE">UGEM</a>)
Come on, you may not want to admit it, but emerging markets are really the only way to get some excitement out of investing in utilities stocks. UGEM is not pure play on Latin America, but Brazil and Chile combine for 43% of the ETF's weight. Other country weights include India, Malaysia and Poland. Why consider UGEM? Because while Utilities Select SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) is down year-to-date, UGEM is up almost 21%.

ARGT

EWZS

UGEM

Four More LatAm ETFs Your Broker Forgot to Mention

One of the primary reasons why ETFs have become so popular and why they're more than just a pesky younger sibling to mutual funds is costs. As in ETFs a vast majority of the time are far cheaper than mutual funds. Even if we're gracious enough to say the cost of an "average" mutual fund is "just" 1%, there's an excellent chance there is a cheaper, comparable ETF on the market. 

Cost is a reason that ETF issuers such as State Street's (NYSE: <a class="ticker" href="/stock/stt#NYSE">STT</a>) State Street Global Advisors and Vanguard, among others, have able to establish dominant positions in the ETF market. 

Yes, there are plenty of ETFs trading today that we like that have expense ratios that are already at bare bones levels. However, in a universe that is populated by almost 1,500 ETFs and ETNs, there are plenty of should lower their expense ratios and do so sooner than later. Here are 10 we've nominated for the fee chopping block.

iShares High Dividend Equity Fund (NYSE: <a class="ticker" href="/stock/hdv#NYSE">HDV</a>)
The fact that HDV has over $1.2 billion in AUM and isn't even a year old yet is impressive and there is good reason to <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2344071/etfs-walking-softly-with-big-aum-hauls">to like this fund</a>. There's also good reasons for iShares to consider paring HDV's 0.4% expense ratio. 

Two of HDV's most obvious competitors, the Vanguard Dividend Appreciation ETF (NYSE: <a class="ticker" href="/stock/vig#NYSE">VIG</a>) and the SPDR S&amp;P Dividend ETF (NYSE: <a class="ticker" href="/stock/sdy#NYSE">SDY</a>) feature lower fees. In fact, VIG charges 0.18% and this is important for long-term investors, which we assume dividend ETFs are attracting.

Vanguard Financials ETF (NYSE: <a class="ticker" href="/stock/vfh#NYSE">VFH</a>)
It's odd that any Vanguard fund would make this list because it has been a low-cost strategy that has enabled the firm to become the third-largest U.S. ETF sponsor. However, VFH features an expense ratio of 0.23%. Not bad, but it's well above the 0.18% charged by the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>).

SPDR S&amp;P Russia ETF (NYSE: <a class="ticker" href="/stock/rbl#NYSE">RBL</a>)
The SPDR S&amp;P Russia ETF is actually cheaper than the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>) and not that much more expensive than the iShares MSCI Russia Capped Index Fund (NYSE: <a class="ticker" href="/stock/erus#NYSE">ERUS</a>), but the SPDR offering is well behind both its rivals in terms of AUM. A fine way to fix that situation would be to go to an expense ratio below 0.5%.

Market Vectors Pharmaceuticals ETF (NYSE: <a class="ticker" href="/stock/pph#NYSE">PPH</a>)
We're willing to extend the Market Vectors Pharmaceuticals ETF the courtesy of some time because it has only been a couple of months since Van Eck rolled this old HOLDRs fund into the Market Vectors mix. PPH's 0.35% expense ratio isn't high per se, it's just high compared to the Health Care Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlv#NYSE">XLV</a>).

First Trust NYSE Arca Biotech Index Fund (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>)
FBT has had moments in the sun this year and some <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2353763/friday-slide-opportunity-or-red-flag-for-biotech-etfs-gild-ib">glum days as well</a>. Overall though, this has been solid biotech performer this year. But FBT charges 0.60% and that's far higher than the SPDR S&amp;P Biotech ETF (NYSE: <a class="ticker" href="/stock/xbi#NYSE">XBI</a>) and the iShares Nasdaq Biotechnology ETF (Nasdaq: <a class="ticker" href="/stock/ibb#Nasdaq">IBB</a>).

Global X Silver Miners ETF (NYSE: <a class="ticker" href="/stock/sil#NYSE">SIL</a>)
Including SIL on this list isn't a criticism of the fund or its 0.65% expense. Consider it more along the lines of friendly advice. As we have <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2316442/etf-showdown-room-for-two">previously noted</a> SIL faces new competition in the form of a cheaper iShares offering. SIL's first-to-market advantage will come in handy to be sure, but sometimes it's better to be safe than sorry when it comes to ETF expense ratios, especially when there's new competition from iShares.

EGShares India Small Cap ETF (NYSE: <a class="ticker" href="/stock/scin#NYSE">SCIN</a>)
It's no secret that we really like <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/02/2356406/five-thinly-traded-etfs-to-consider-ald-scin-bno">this ETF</a> and the rival Market Vectors India Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scif#NYSE">SCIF</a>). The drawback to both is that they charge 0.85% and that's punitive to long-term investors. As is the case with SIL, some new competition from iShares could do the trick and prompt EGShares and Van Eck to cut the costs on their India small-cap funds.

iShares Dow Jones US Oil Equipment Index Fund (NYSE: <a class="ticker" href="/stock/iez#NYSE">IEZ</a>)
We're only speculating here, but maybe a conversation has taken place around the iShares offices that IEZ having almost $535 million in AUM with an expense ratio of 0.47% is a good thing. That's a fine AUM haul for any ETF, but maybe a lower expense ratio would boost the AUM number. The Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>) has fees of 0.35% and that difference in expenses has helped OIH amass more than double the AUM total of its iShares rival.

First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) 
Quiet as it has been kept, the First Trust Brazil AlphaDEX Fund has actually outperformed the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) this year. The issue is that the margin of outperformance isn't wide enough for long-term investors paying 0.8% for FBZ compared to 0.59% for EWZ. Translation: If FBZ cuts its fees and folks start really paying attention to the ETF, EWZ could eventually have a legitimate rival on its hands.

iShares Dow Jones US Consumer Goods ETF (NYSE: <a class="ticker" href="/stock/iyk#NYSE">IYK</a>)
The fact that the iShares Dow Jones US Consumer Goods ETF has over $384 million in AUM is proof positive of two things: Brand recognition is import in the world of ETFs and someone isn't doing their homework. We say that because IYK charges 0.47%. The comparable SPDR and Vanguard staples ETFs charge 0.18% and 0.19%, respectively. Again, staples stocks and ETFs are usually held for extended time frames, so the fees really matter.

Dividends

Pre-Market Outlook

After-Hours Center

ERUS

First Trust NYSE Arca Biotechnology Index Fund

iShares Dow Jones US Oil Equipment & Services Index Fund

iShares Trust Dow Jones USnsumer Goods Sector Index Fund

Merrill Lynch Pharmaceutical HOLDRs Trust

SCIF

Emerging Global Shares INDXX India Small Cap Fund

SCIN

10 ETFs That Should Lower Their Expense Ratios

First Trust, one of the fastest growing U.S. ETF issuers, filed plans for seven new country-specific ETFs, all of which will compete directly with existing products from iShares, the worlds largest ETF issuer.

The new ETFs First Trust may introduce are the First Trust Germany AlphaDEX Fund, First Trust Canada AlphaDEX Fund, First Trust Australia AlphaDEX Fund, United Kingdom AlphaDEX Fund, First Trust Taiwan AlphaDEX Fund, Hong Kong AlphaDEX Fund and the First Trust Switzerland AlphaDEX Fund.

The First Trust Switzerland AlphaDEX Fund, First Trust Germany AlphaDex Fund, First Trust Hong Kong AlphaDex Fund, First Trust Taiwan AlphaDEX Fund and the First Trust United Kingdom AlphaDEX Fund will feature expense ratios of 0.8%. Expense ratios were not disclosed for the Australia and Canada ETFs.

In 2011, First Trust introduced nine AlphaDEX funds tracking various emerging markets and developed and emerging regions including the First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) and the First Trust South Korea AlphaDEX Fund (NYSE: FKO).

The new batch of ETFs First Trust has filed plans for represent potential rivals to the some well-established iShares ETFs such as the iShares MSCI Australia Index Fund (NYSE: <a class="ticker" href="/stock/ewa#NYSE">EWA</a>), which has $2.7 billion in assets under management. The iShares MSCI Canada Index Fund (NYSE: <a class="ticker" href="/stock/ewc#NYSE">EWC</a>) has over $4.6 billion in AUM while the iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) has over $2.25 billion in AUM

The iShares MSCI Germany Index Fund (NYSE: <a class="ticker" href="/stock/ewg#NYSE">EWG</a>) has over $2.27 billion in AUM and the iShares MSCI Hong Kong Index Fund (NYSE: <a class="ticker" href="/stock/ewh#NYSE">EWH</a>) has almost $1.9 billion in AUM. The iShares MSCI Switzerland Index Fun (NYSE: <a class="ticker" href="/stock/ewl#NYSE">EWL</a>) has $490.2 million in AUM.

All of those iShares ETFs are by far the largest ETFs offering exposure to aforementioned countries. First Trust had 60 ETFs with almost $6.3 billion in AUM at the end of last year.

First Trust Files For 7 New Country-Focused ETFs

It's back. One of our most popular features from the December 2010 holiday season returns as Benzinga examines some of the top new ETFs of 2011 and the issuers behind those funds. And what a year to do that.

Sure, the pace of ETF closures has picked up recently, but when the ball drops on 2011, hundreds of new ETFs will have come to market while the amount of ETF closures will be scant by comparison. 

Some ETF issuers have been especially prolific this year on the new product front and one of those firms is First Trust, which has been in a race with Global X to see who could bring the most new ETFs to market in 2011. First Trust is now the eleventh-largest U.S. ETF issuer and the firm had 60 ETFs with almost $6.3 billion in assets under management at the end of November, according to National Stock Exchange data.

Remember: We have some rules with this feature. "New" will be defined as ETFs that debuted in 2011. For issuers that have rolled out a lot of new funds, we'll look at only four or five that have been successful in attracting investor inflows. 

For example, a First Trust ETF that debuted in January and has only garnered $2 million in AUM (a hypothetical example) will NOT make this list. With that let's a have a look at a few of the firm's more successful new ETFs.

First Trust ISE Cloud Computing Index Fund (Nasdaq: <a class="ticker" href="/stock/skyy#Nasdaq">SKYY</a>):
Inception date: July 5th 
Year-to-date performance: -15%
Average volume: 46,500 shares
Investor Appeal Grade: A. As we have noted <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/12/2201535/twelve-for-12-niche-etfs-to-watch-in-the-new-year">SKYY has taken its lumps</a>, but over $60.2 million in AUM indicates investors like the idea of an ETF devoted to cloud computing.

First Trust NASDAQ CEA Smartphone Index Fund (Nasdaq: <a class="ticker" href="/stock/fone#Nasdaq">FONE</a>):
Inception date: February 17th
Year-to-date performance: -20.7%
Average volume: 1,900 shares.
Investor Appeal Grade: C-. For all the attention being paid to smartphones as an investment theme, FONE has not shined as bright as some would have predicted. Over $13 million in AUM in less than a year of trading isn't bad and it's enough to keep the ETF alive for a while, but overall FONE has been hung up on by investors. Maybe 2012 will bring better things for this niche ETF.

First Trust NASDAQ Global Auto Index Fund (Nasdaq: <a class="ticker" href="/stock/carz#Nasdaq">CARZ</a>):
Inception date: May 9th
Year-to-date performance: -24.9%
Average volume: 522 shares
Investor Appeal Grade: C-. And we're being kind. For a while, there was no ETF devoted to the auto industry, so it looked like CARZ was going to fill a niche that need filling. The ETF only has $3.4 million in AUM. That combined with its weak volume are causes for concern.

First Trust Mid-Cap Growth AlphaDEX Fund (NYSE: FNY):
Inception date: April 19th 
Year-to-date performance: -8%
Average volume: 8,500 shares
Investor Appeal Grade: B. There are tons of ETFs that are growth and or value plays on the various market cap spectrums, but FNY has handled its rookie year with aplomb, raking in over $7.5 million in AUM. Plus, the ETF's average volume is at least enough to keep it around for a while. FNY is easily an unheralded mid-cap play worth a look in a strong uptrend for the broader market. 

Other new ETFs introduced by First Trust this year include the following: First Trust Mega Cap AlphaDEX ETF (NYSE: <a class="ticker" href="/stock/fmk#NYSE">FMK</a>), First Trust BICK ETF (NYSE: <a class="ticker" href="/stock/bick#NYSE">BICK</a>), First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>), First Trust China AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fca#NYSE">FCA</a>) and the First Trust Mid-Cap Value AlphaDEX Fund (NYSE: FNK).

Reviews

BICK

CARZ

FONE

SKYY

New Kids On The Block: First Trust's Top New ETFs Of 2011

Here is the ETF Professor's ETF Watch List for Tuesday November 15, 2011.

The iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: <a class="ticker" href="/stock/jjc#NYSE">JJC</a>) is perking up a bit.

The Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) was up 5.4% on Monday.

The ProShares UltraShort Materials (NYSE: <a class="ticker" href="/stock/smn#NYSE">SMN</a>) might be worth a look.

Emerging markets plays of the day: iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>), Direxion Daily Emerging Markets Bear 3X Shares (NYSE: <a class="ticker" href="/stock/edz#NYSE">EDZ</a>) and the First Trust Brazil AlphaDEX Index Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>).

Direxion Daily Emerging Markets Bear 3x Shares

iPath Dow Jones UBSpper Subindex Total Return ETN

PowerShares DB US Dollar Index Bullish Fund

ETFs to Watch November 15, 2011

There are no shortage of ETFs offering exposure to China. In fact, there are over 100 funds offering Chinese exposure, making China the most represented of the BRIC quartet in the ETF universe. 

While there may a lot of China-specific ETFs out there, one fund is still the boss of the block and that is the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>), which is just a couple of months shy of its eighth birthday. In that time, FXI has become the dominant and most liquid China-specific ETF, hauling in nearly $6 billion in assets.

That hasn't keep other ETF issuers from trying to encroach on FXI's territory. Some have with varying degrees of success and one of FXI's newer potential rivals is the First Trust AlphaDEX China Fund (NYSE: <a class="ticker" href="/stock/fca#NYSE">FCA</a>), which rolled out in April and squares off against FXI in this week's ETF Showdown.

While FXI has the advantage of being the most popular China-specific ETF, that doesn't make it the best China-specific. In fact, a weight of over 51% to financials is and has been troublesome for some time now. 

FCA, with just about $2.4 million in AUM, holds 51 stocks, nearly twice as many as FXI holds and offers a broader approach to the Chinese growth story. Financials are FCA's top sector weight, but at just over 22%. Materials (18.85%), consumer discretionary (16.64%) and industrials (15.16%) also receive double-digit allocations. 

FXI also fails the diversity test when evaluating how the ETF's top-10 holdings are allocated. That group accounts for more than 61% of the fund's weight. On the other hand, FCA doesn't allocate more than 3.64% to any one stock.

Another point in FCA's favor is that does offer some, albeit small, exposure to Baidu (Nasdaq: <a class="ticker" href="/stock/bidu#Nasdaq">BIDU</a>) and Tencent Holdings, two of the biggest Internet names in China. FXI does not. 

FXI has its moments against FCA. Superior liquidity is an obvious one and the older ETF has the lighter expense ratio at 0.72% compared to 0.8% for its new rival. 

Still, those factors aren't enough for FXI to pull this one out. Recently, Benzinga has evaluated some of the new First Trust AlphaDEX international ETFs against existing rivals, concluding the First Trust AlphaDEX Brazil Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) is a better bet than the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), but also noting that the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) is preferable to the First Trust AlphaDEX South Korea Fund (NYSE: FKO). 

We'll break that tie by giving FCA the nod as the preferred way to take a nibble at China when the time is right.

BIDU

ETF Showdown: Enter The Dragon

Back in April, First Trust, the fastest-growing of the top-10 U.S. ETF sponsors rolled out 13 new ETFs, including nine additions to the firm's AlphaDEX series. Some of those funds, such as the First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>) and the First Trust China AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fca#NYSE">FCA</a>), looked to be obvious shots across the bow toward existing ETFs from other issuers.

Add to that list the First Trust South Korea AlphaDEX Fund (NYSE: FKO). FKO made its debut on April 18 becoming the third South Korea-specific ETF available to U.S. investors. The big kahuna, the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) and the IQ South Korea Small-Cap ETF (NYSE: <a class="ticker" href="/stock/skor#NYSE">SKOR</a>) blazed the South Korea trail before FKO did.

The more apt comparison for FKO is to EWY as FKO is more large-cap focused in its approach and as Benzinga previously noted, FKO was biting off a big challenge here. After all, EWY had the South Korea-specific ETF market to itself since May 2000, which has allowed the ETF to accumulate over $4 billion in assets under management.

We're not going to malign FKO because the ETF has the potential to be a legitimate alternative to EWY down the road. Some of the new AlphaDEX emerging markets ETFs were looking like positive surprises against their more established rivals prior to the recent market meltdown. FBZ being a prime example.

That said, FKO has attracted just $2.5 million in AUM to this point, and its expense ratio of 0.8% is far higher than the 0.61% offered by EWY. Beyond that, FKO is home to 50 stocks while EWY offers broader exposure to the South Korean growth story with 105 stocks.

FKO does go about its business in far different fashion than EWY. For example, information technology stocks account for 12.6% of the new ETF's sector weight. That group accounts for over 24% of EWY's weight. Materials receive an allocation of over 24% in FKO, but that number drops to 15.4% in EWY. Consumer discretionary names make about 20% of FKO and just over 18% of EWY.

FKO's big problem to this point has been performance as the ETF is down almost 22% since its debut while SKOR is flat and EWY is up 10% over the same time. EWY and SKOR have the looks of solid buy-on-the-dip candidates because of South Korea's relative steadiness compared to other emerging markets. If the tide rises rapidly enough, perhaps FKO goes along for the ride, but at this point it's safe to say FKO still has a lot to prove.

Small Cap Analysis

SKOR

Under The Hood: The "Other" South Korea ETF

In the world of ETFs tracking Latin America, there are country-specific plays, with most being devoted to Brazil and there are regional plays that are de-facto Brazil plays because of their excessive weights to the region's largest and fastest growing economy.

Inevitably, these ETFs feature large weights to Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>), Brazil's state-run oil producer, and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>), the world's largest iron ore producer. Another usual suspect in these regional ETFs is America Movil (NYSE: <a class="ticker" href="/stock/amx#NYSE">AMX</a>). 

Such is life with the iShares S&amp;P Latin America 40 Index Fund (NYSE: <a class="ticker" href="/stock/ilf#NYSE">ILF</a>) as Vale, America Movil and various Petrobras securities account for over 32% of that ETF's weight. Those stocks combine for over 25% of the weight of the SPDR S&amp;P Emerging Latin America ETF (NYSE: <a class="ticker" href="/stock/gml#NYSE">GML</a>).

Given the struggles of Petrobras this year, investors might do well to take a look at a different type of LatAm regional play. Today's “Under The Hood” candidate First Trust Latin America AlphaDEX Fund (NYSE: FLN) fits the bill.

FLN made its debut in April as part of the large suite of international AlphaDEX funds launched by First Trust, the fastest growing of the top-10 U.S. ETF sponsors. Like the other ETFs in that group, FLN tracks a modified equal-dollar weighted index which means the best performers figure most prominently in the ETF. And like the First Trust Brazil AlphaDex Index Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>), FLN isn't heavily allocated to Petrobras and Vale.

In just over three months on the market, FLN has accumulated $2.9 million in assets under management and the 49-stock sports sector diversity that is at least on par with its more established rivals. Utilities, telecom, materials, consumer staples, financials and industrials all receive double-digit allocations in FLN.

A smaller weight to energy in FLN is actually an advantage of given the aforementioned struggles of Petrobras. Still, FLN does share one similarity with other LatAm regional ETFs in that Brazil accounts for 79% of the ETF's weight.

That's a quibble, but as a new ETF, FLN may have been able to differentiate itself even more with some type of noteworthy exposure to Colombia and Peru, which it doesn't offer.

That said, FLN deserves this much credit: If you can get past its higher fees, this rookie ETF has sharply outperformed GML and ILF since its inception and that's a fact that cannot be diminished.

Under The Hood: A Different Kind Of LatAm Play

Not all of them have been good ideas and not all of them will be around five years from now, but ETF issuers have been firing off new ETFs and ETNs at a rapid pace this year as the March-June period saw over 150 new funds come to market.

Choice is always good for investors, but as has been noted so often in the past, a new ETF is not comparable to a hot stock IPO. Remember when LinkedIn (NYSE: <a class="ticker" href="/stock/lnkd#NYSE">LNKD</a>) more than doubled on its first day of trading? That doesn't happen with new exchange traded products, at least not often enough to bank on it being a regular event.

Think of a new ETF or ETN as a fine wine: Give it some to breath and mature. However, there are few where it might pay to crack open the bottle sooner rather than later. Here are five new ETFs to consider right now. (For the purposes of simplicity, this list is confined to ETFs introduced this year.)

1) First Trust ISE Cloud Computing Index Fund (Nasdaq: <a class="ticker" href="/stock/skyy#Nasdaq">SKYY</a>):
Forget ETFs that have rolled this year, SKYY isn't even a week old, but it is the first ETF devoted to the cloud-computing craze. This equal-weighted fund can at least lay claim to being the first way to gain access to the cloud and that first-to-market advantage cannot be understated as Forrester Research says global cloud spending will jump to $241 billion from $40 billion over the next decade. Google (Nasdaq: <a class="ticker" href="/stock/goog#Nasdaq">GOOG</a>), Netflix (Nasdaq: <a class="ticker" href="/stock/nflx#Nasdaq">NFLX</a>) and Salesforce.com (NYSE: <a class="ticker" href="/stock/crm#NYSE">CRM</a>) are just a few of SKYY's 40 holdings.

2) First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>):
Not yet three months old, FBZ has done an admirable job of attracting assets, raking in almost $7.2 million in assets under management. On the surface, FBZ looks like a competitor to the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), but FBZ is vastly different as it uses an equal-weight by quintile approach. Not to mention, Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>) aren't critical to FBZ as they are to EWZ.

3) IQ Global Agribusiness Small Cap ETF (NYSE: <a class="ticker" href="/stock/crop#NYSE">CROP</a>):
Just a few days shy of its four-month anniversary, CROP has proven to be more than just a rival to ETF that focus on large-cap agribusiness stocks. This ETF is a legitimate alternative. CROP has hauled in almost $55 million in AUM. Not to mention CROP has outperformed the Market Vectors Agribusiness ETF (NYSE: <a class="ticker" href="/stock/moo#NYSE">MOO</a>) since its debut.

4) Market Vectors Russia Small-Cap ETF (NYSE: <a class="ticker" href="/stock/rsxj#NYSE">RSXJ</a>):
Market Vectors certainly knows its way around Russia as the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>) is the oldest, biggest and most heavily traded Russia-specific ETF. Its small-cap cousin offers something large-cap Russia ETFs don't: Sector diversity. Energy names only account for 17.5% of RSXJ's weight and four other sectors (utilities, materials, industrials and consumer staples) also get double-digit weights.

5) Global X SuperDividend ETF (NYSE: <a class="ticker" href="/stock/sdiv#NYSE">SDIV</a>):
One hundred stocks at 1% each certainly remove the stock-picking burden from income investors and they seem to like the idea as SDIV has attracted a stellar $37.5 million in AUM in just five weeks of trading. The performance isn't there quite yet as SDIV is down almost 1.7% since its debut, but that's more a result of challenging market environment. This one is here to stay and the AUM number highlights that fact.

CROP

GOOG

LNKD

NFLX

RSXJ

SDIV

Five New ETFs To Buy Now

In April and May alone, a combined 82 new exchange traded products came to market, again indicating issuers are nowhere close to running short of ideas for new ETFs and ETNs. 

That's good news for investors, but not everything that is new, ETFs included, is worth embracing. New ETFs are a lot like aspiring actors that move to Los Angeles. Some really will end up to be big stars. Others may have years of getting bit parts, but that is enough to sustain them and keep them on the market. Others will simply disappear.

Here's a list of five ETFs that have the right stuff in terms of not only being able to stay on the market for years to come, but also in terms of attracting robust trading volume and assets under management.

1) Global X FTSE Andean 40 ETF (NYSE: <a class="ticker" href="/stock/and#NYSE">AND</a>):
This may not be the best day to extol the virtues of AND, the first ETF offering combination exposure to Chile, Colombia and Peru, because Peruvian stocks are getting slammed on the back of that country's presidential election results. 

That said, the new MILA exchange that provides a home for equities from all three of the aforementioned countries could be a catalyst for AND going forward and the ETF has attracted over $7.7 million in assets under management in four months on the market. That's not a bad haul. 

2) First Trust Nasdaq CEO Smartphone Index Fund (Nasdaq: <a class="ticker" href="/stock/fone#Nasdaq">FONE</a>):
FONE is a great example of right place, right time in the ETF world. The ETF is just a few days shy of being four months old and has accumulated almost $17 million in assets under management. While investors should note that FONE isn't heavily allocated to popular smartphone plays such as Apple (Nasdaq: <a class="ticker" href="/stock/aapl#Nasdaq">AAPL</a>) and Google (Nasdaq: <a class="ticker" href="/stock/goog#Nasdaq">GOOG</a>), the smartphone craze is only expected to get stronger over the next few years, and that bodes well for FONE's future.

3) First Trust Brazil AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>):
When FBZ made its mid-April debut, we noted it was facing stiff competition as there were already a healthy number of ETFs offering Brazil exposure on the market. While challenging the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) is no small task, FBZ has an interesting niche for itself in that it offers plenty of exposure to Brazilian mid-caps, meaning investors don't have to worry about excessive allocations to Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>) and Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>). FBZ has attracted almost $7.6 million in AUM in less than two months of trading.

4) Market Vectors LatAm Aggregate Bond ETF (NYSE: <a class="ticker" href="/stock/bono#NYSE">BONO</a>):
Investors still like Latin America and apparently they like the bonds from that corner of the globe, too. BONO features the following country weights: Brazil 36.52%, Mexico 29.03%, Colombia 12.19%, Venezuela 6.50% and Argentina 4.17%. Issues from Chile, Peru, Panama, Jamaica and Uruguay are also featured in the ETF's all-investment-grade mix. Not even a month old, BONO has already attracted $7.6 million in AUM.

5) Global X Fishing Industry ETF (NYSE: <a class="ticker" href="/stock/fisn#NYSE">FISN</a>):
FISN may seem like an obscure idea, but there are fundamentals in place that could keep this 20-stock ETF around for a long time. Don't worry about the fact that you probably haven't heard of many of FISN's holdings because fishing is a huge global industry.

In 2008, CNN reported the industry employed 200 million across the globe and generated $80 billion in revenue. China's per-capita fish consumption has been growing by 5.7% a year for the past five decades. No, those stats aren't guarantees FISN will be the best ETF ever, but hey, the ETF has accumulated nearly $2.9 million in AUM in less than a month on the market.

AAPL

BONO

FISN

New Kids On The Block: Five New ETFs With The Recipe For Success

When First Trust, the Illinois-based ETF issuer with over $8 billion in assets under management, rolled out its suite of AlphaDEX international ETFs last month, we noted one of the more interesting options within group was the First Trust AlphaDEX Brazil Fund (NYSE: <a class="ticker" href="/stock/fbz#NYSE">FBZ</a>).

We also noted FBZ was going to be facing some stiff competition as the arena of ETFs offering exposure to Brazil as that number is close to 70 occupants and doing battle with an ETF like the iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>) is no small task.

Just about six weeks removed from its April debut, it appears that FBZ is getting along quite nicely, thank you very much. Whether it's a result of a unique concept, investors looking for another way of garnering Brazil exposure beyond the usual suspects or a combination of those factors, FBZ has attracted over $7.4 million in AUM since its debut.

No, it's not reasonable to expect that FBZ will continue attracting over $1 million in AUM per week as it has thus far, but it is clear this new Brazil ETF is off to a fine start and investors are not being deterred by its 0.8% expense ratio. 

FBZ is proving to be a great example of why investors need to realize that just because two ETFs have Brazil (or any other country or sector) in their titles, that doesn't ensure lock-step performance. In fact, FBZ is proving to be the superior alternative to EWZ in recent weeks. In the past month, FBZ is down just half a percent while EWZ is off 3%.

One reason for that may FBZ's defensive nature. For the investor that wants to play Brazil's high beta ways through names like Vale (NYSE: <a class="ticker" href="/stock/vale#NYSE">VALE</a>) and Petrobras (NYSE: <a class="ticker" href="/stock/pbr#NYSE">PBR</a>), EWZ will probably always be the ETF standard.

On the other hand, investors that want to play a little defense without sacrificing emerging markets exposure should look at FBZ. Utilities, telecoms and consumer staples names account for over 43% of the weight in this 52-stock ETF.

The Brazil ETF story is far from over, but at this point, it's fair to say the chapter on FBZ should not be overlooked.