Checking In: Hunting For Emerging Markets Value

Given the prodigious rate at which it has been introducing new ETFs over the past year, New York-based ETF issuer Global X has provided ample fodder for the "Checking In" space and one of the firm's rookie

has once again caught our attention. With the recent run higher by emerging markets ETFs and the even more recent two-day pullback in the asset class to start this week, it might just be a good time to check in with the Global X Russell Emerging Markets Value ETF

, which tracks the Russell Emerging Market MegaCap Value Index. Many of the 82-stocks that make up EMVX's holdings are names U.S. investors are already familiar with and since they're mega-cap names that could cut both ways regarding the future success of EMVX. On one hand, investors may embrace EMVX because they're already familiar with names like Petrobras

, PetroChina

and China Mobile

. On the other hand, more well-established multi-country emerging markets ETFs that track large caps are heavy on these names as well and some of those ETFs, say the Vanguard Emerging Markets Stock ETF

for example, come with lower fees than the 0.69% expense ratio offered by EMVX. Here's what makes EMVX interesting and risky at the same time: Sector diversity, or lack thereof. Energy gets a weight of over 45%. Country diversity, or lack there of. Brazil, China, Russia and South Korea combine for roughly 87% of the ETF's weight. The allocation of almost 25% to South Korea is high compared to what you'll find with other multi-country EM ETFs, but that's a not bad thing as South Korea isn't as volatile as Brazil or Russia. Not even 12 weeks old, EMVX has attracted $2.71 million in assets under management since its Jan. 24 inception. At this point, the bottom line with EMVX may be that it's not going to a pose a threat to bigger ETFs such as VWO in the near-term, but the ETF is loaded with value, "buy on the dips" emerging markets plays, so the ETF certainly has potential to at least be a rising EM star this year.