ETF Chart of the Day: Philippines

June 6th at 2:42pm by Paul Weisbruch, Street One Financial

Weakness in broad based Emerging Markets equities and related ETFs has spilled over to what has been a strong out-performer on a relative strength basis, EPHE (iShares MSCI Philippines, Expense Ratio 0.59%).

The fund, which debuted in September of 2010, has grown to well over $400 million in assets under management, but has seen about 10% of these levels leave the fund in just the past week or so thanks to redemption activity.

In fact, a quick glance at a candlestick chart in EPHE will show ten straight down days in the fund (prior to today’s early day bounce) and a precipitous drop from the $42-$43 level to where we are currently ($36.35 close yesterday).

Trading volumes have been exceptionally heavy in the fund for more than two weeks now, and the ETF is hovering above its 200 day MA at these levels. [Emerging Market ETFs Slammed]

Top components in EPHE are SM Investments Corp (11.49%), Ayala Land Inc. (8.21%), SM Prime Holdings Inc. (6.40%), Philippine Long Distance Telephone (6.06%), and BDO Unibank Inc. (6.04%).

From a sector standpoint, Real Estate has the heaviest weighting in EPHE, at 21.89%, followed by Consumer Discretionary (19.75%), and Utilities at 14.08%.

EPHE remains the only “pure-play” for Philippine equity market access in the ETF universe, although there are other ETFs that have some weighting or exposure to the country.

PIE (PowerShares DWA Emerging Market Technical Leaders Portfolio, Expense Ratio 0.90%), EMFN (iShares MSCI Emerging Markets Financials Sector, Expense Ratio 0.66%), and UGEM (EGShares Utilities GEMS, Expense Ratio 0.85%) all have weightings to the Philippines for instance (8.05%, 5.10%, and 4.47% accordingly), and are considered broader based EM plays.

At these levels EPHE may trade sideways, especially given the selling pressure and net redemption flows lately coming out of benchmark EM ETFs EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%) and VWO (Vanguard Emerging Markets, Expense Ratio 0.18%), but regular trading volume and activity has never been higher in this fund, so it is worth watching from both sides of the tape as directional opportunities emerge.

iShares MSCI Philippines

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

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