ETF Spotlight: SPDR S&P Emerging Markets Small Cap (EWX)

July 15th at 2:00pm by Tom Lydon

ETF Spotlight on SPDR S&P Emerging Markets Small Cap (EWX), part of a recurring series. Assets: $25.4 million

Holdings: This fund is a market-cap weighted index that represents the small-cap segment of emerging countries in the BMI Global Equity Index. Its top holdings include such names as Shimao Property Holdings, Li Ning Co. and Foschini Limited. Taiwan is the top country, with a 30.5% weighting. It’s followed by China (10.9%), South Africa (10.2%) and Brazil (8.8%). Also seen in the fund are Poland, Turkey, Israel, Morocco and Indonesia.

Objective

EWX tracks the S&P Emerging Markets Under USD2 Billion Index. The index includes companies with a market cap of at least $100 million, has 233 components and comes with a 0.65% expense ratio.

What’s Good

  • This ETF has been one of the top performers so far in 2009, up 51.1%. In the last three months, it’s up 33.1%
  • It’s spread out across several sectors, including financials (20.8%), information technology¬† (20.2%), consumer discretionary (16.7%) and industrials (14.5%)
  • It’s a way to target two areas attracting investors right now: small caps and emerging markets

The Latest News

  • Small caps are historically known for performing well in recoveries; their small size makes them nimble and quicker to react to changing market conditions
  • In Asia, which is heavily represented in this fund, small companies tend to be more focused on their domestic economies and less export-oriented than larger ones; domestic demand in some Asian markets has held up better than in other areas, says an analyst on Blogging Stocks
  • Emerging markets have been getting a fair bit of attention, thanks to recent strong performance and increasing evidence of decoupling

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Tickers

EWX