Holdings: EEG holds companies domiciled in emerging markets; some of the top companies in the fund include Russian natural gas company Gazprom, Brazilian energy company Petroleo Brasileiro, Latin American wireless provider America Movil and Bank of China.

Objective: EEG seeks to track the Dow Jones Emerging Markets Titans Composite Index, which is an index composed of a representative sample of 100 emerging market companies deemed by Dow Jones to be leaders in each of 10 sectors.

Things to Know

• Brazil is the top country, with 24.9% of the weighting. China has 24.3%, Russia has 13.4% and India has 13%. Other countries include Mexico, South Africa, Chile and Indonesia.
• Oil and gas is the top sector, weighted at 30.8%; financial is 22.1%; telecommunications is 11.6%; and basic materials is 9.3%.
• The expense ratio is 0.75%.
• EEG is a relative newcomer on the ETF scene – the fund launched on July 22.

The Latest News

• Emerging Global Advisors CEO Bob Holderith feels that interest in emerging markets should continue to expand. “It’s a 25-year growth story in its sixth year.” The positive growth outlook for emerging markets goes hand-in-hand with the changing demographic picture in these countries.
• Holderith notes that in most of these countries, there’s a huge young population, all looking for the “Western experience”: cell phones, iPods, dining out and more. (More on Emerging Global Advisors).
• Although the pace may eventually slow down, Barron’s reports that emerging markets still have room left to grow in the long haul. And for the time being, they may be the place to hide out as developed markets still work toward normalcy.
• Emerging markets already account for one-third of the global GDP and 10% of the world’s market capitalization.

Mexico’s economy is showing early signs of recovering from its deepest recession since 1995. Economic activity rose 2.5% month-over-month in July, and industrial output and services are on the rebound. Tourism could put a dent in economic growth, as receipts are predicted to decline 16% this year, reports the Latin Business Chronicle. Many visitors have stayed away because of drug violence and the H1N1 flu outbreak.

As the country pulls itself out of a recession, the government is examining fiscal policy and reform, states Ken Parks for The Wall Street Journal.

The government wants to raise income and excise taxes, as well as slap a special 2% sales tax on all goods and services as it tries to replace lost oil revenue and stave off a sovereign rating downgrade.  The final answer should come by mid-November as Congress puts together its budget.

Mexico’s IPC index rose a remarkable 20% during the third quarter and 28% year-to-date, however, it has started to ease as U.S. economy continues to show signs of a wary recovery.  The United States buys 80% of Mexico’s exports and employs millions of migrant laborers who sent home $25.1 billion in remittances last year.

• iShares MSCI Mexico Investable Mkt Idx (EWW): which is up 42.3% year-to-date.

For more stories on Mexico, visit our Mexico category.

Kevin Grewal contributed to this article.

Mexico’s economy, Latin America’s second largest, contracted 10.3% in the second quarter year-over-year, manufacturing declined 16.4% and the service industry shrank 10.4%, reports Jens Erik Gould for Bloomberg.

Mexico has been stuck in a lull and joblessness has increased as the recession in the United States, which takes in 80% of Mexico’s exports, greatly decreased demand for goods.

Economist Rogelio Ramierz de la O expects the Mexican peso will depreciate along with the shrinking economy. The Central Bank estimates the economy will shrink up to 7.5% this year. A battered economy translates into less tax revenue, and including falling oil revenue, will create a budget deficit of 3% of GDP this year.

The quarter-on-quarter drop of 1.12% in the second quarter comes to an annualized decline of 4.4%, which marked a great improvement from the previous quarter, report Nicholas Casey and Anthony Harrup for The Wall Street Journal. Alfredo Coutino, director for Latin America at Moody’s, thinks Mexico may step out of the recession by the end of the third quarter.

Why is its ETF doing so well? Thank Mexico’s robust telecom sector, in which the ETF has a 38% weighting. Forecasts for the sector in Latin America call for continuing strong demand and strong revenue growth throughout the continent.

• iShares MSCI Mexico Investable Mkt Idx (EWW): up 38% year-to-date

For more information on Mexico, visit our Mexico category.

Max Chen contributed to this article.

The dollar has taken a hit over the past few months and many currency experts believe that it will continue to remain weak because American consumers aren’t feeling confident,  U.S. policymakers want to keep U.S. goods cheap to entice foreigners to buy more of our stuff and the ballooning of the U.S. budget deficit, states Gary Gordon at ETF Expert.

As a result of the aforementioned, 12 out of the 14 “pure play” currency ETFs are trading above their 200-day moving averages and most have year-to-date gains. (The two exceptions are the PowerShares DB U.S. Dollar Bullish (UUP) and the CurrencyShares Mexican Peso (FXM)).

To play currencies, mind the trend lines and have an exit strategy if you’re invested.

Some of the best performing currency ETFs include:

• CurrencyShares British Pound Sterling (FXB): up 12.5% year-to-date

• WisdomTree South African Rand (SZR): up 26.2% year-to-date

• WisdomTree Brazilian Real (BZF): up 20.1% year-to-date

For more information on currency ETFs, take a look at our special report on currencies and visit our currency etf category.

Read the disclaimer, as Tom Lydon is a board member of Rydex Funds.

Kevin Grewal contributed to this article.

Around 80% of Mexico’s exports go to the United States, report Hugh Collins and Valerie Rota for Bloomberg. The Mexican economy is also heavily reliant on its non-oil export sector, and if that sector slows, then the economy comes to a crawl. In fact, both Standard & Poor’s and Fitch Ratings reduced the outlook on Mexico’s credit rating to BBB+, citing the government’s low tax revenue and dependence on crude oil exports.

President Felipe Calderon says Mexico’s economy contracted at an annualized 9% in the first quarter year-over-year, according to Trading Markets. The Central Bank calculates Mexico’s GDP will fall by 9.5% in the second half of 2009.

Calderon has pointed to the $4 billion in direct investment so far this year as a sign that investors favor Mexico’s lower production and logistics costs. He also expects Mexico to spearhead the recovery of the global automotive industry, noting that the auto sector represents 20% of Mexico’s GDP and supports 3 million households.

• iShares MSCI Mexico Investable Mkt Idx (EWW): up 23% year-to-date

• CurrencyShares Mexican Peso Trust (FXM): up 6.9% year-to-date

For more information on Mexico, visit our Mexico category.

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Max Chen contributed to this article.

So far in June, ProShares has launched eight international leveraged and inverse ETFs targeting developed and emerging markets. The funds are:

• UltraShort MSCI Europe (EPV)
• UltraShort MSCI Pacific ex-Japan (JPX)
• UltraShort MSCI Brazil (BZQ)
• UltraShort MSCI Mexico Investable Market (SMK)
• ProShares Ultra MSCI EAFE (EFO)
• ProShares Ultra MSCI Emerging Markets (EET)
• ProShares Ultra FTSE/Xinhua China 25 (XPP)
• ProShares Ultra MSCI Japan (EZJ)

It’s not ProShares’ first foray into the international space. Before these eight funds launched, they had six inverse international ETF already in existence.

ProFunds CEO Michael Sapir says the launches are an attempt to round out their existing lineup to a natural place. “ProShares has the domestic U.S. market fairly well-covered,” making it a natural thing to expand beyond those markets.

“We’re trying to offer leveraged and short exposure where people want to see exposure,” Sapir says.

As for all the new leveraged and inverse ETF providers popping up on the scene in the last year or so, instead of competition in the space, Sapir says ProShares’ focus simply remains on what investors are looking for.

“Obviously, we’re aware of others in the marketplace who have taken our lead, but what we’re trying to do is listen to the market place and deliver what they’re asking for.”

ProShares has been having a strong year so far, with nearly $8 billion net inflows. At the moment, Sapir says assets on both the leveraged and inverse side of the equation are fairly equal. He also notes that there’s about $4 billion-$5 billion of exposure in short fixed income, mostly from people looking to hedge the fixed income portion of their portfolios.

Note that leveraged ETFs aren’t for all investors and you should be aware of the risks. These types of ETFs need constant minding and evaluation, and are in no way meant for a buy-and-hold approach. A short or leveraged ETF requires vigilance because they must be rebalanced daily. When the market is volatile, with sustained swings in either direction, the leverage (and the effect of compounding) can make them diverge wildly from what the unwitting investor expects them to do.

For more stories about inverse and leveraged ETFs, visit our long-short ETF category.

ProShares

• UltraShort MSCI Europe (EPV)
• UltraShort MSCI Pacific ex-Japan (JPX)
• UltraShort MSCI Brazil (BZQ)
• UltraShort MSCI Mexico Investable Market (SMK)

Each ETF seeks to deliver twice the inverse of the daily performance of its underlying index. Earlier this month, ProShares released four international ETFs that seek to deliver twice the performance of their underlying indexes.

In Harvard’s top U.S.-listed holdings for the end of the first quarter, the most copious amount of U.S.-listed equity holding by a wide margin was in iShares MSCI Emerging Markets Index (EEM), writes Carl T. Delfeld for Seeking Alpha.

• iShares MSCI Emerging Markets Index (EEM): up 27.2% year-to-date

This has been a growing trend, with more investment interest in individual emerging markets. Harvard isn’t stopping with just EEM, either. The endowment is also increasing its allocation to funds focused on China, Brazil, India, Mexico and South Africa.

Why are emerging markets so attractive these days? The sentiment toward them has been lifting gradually lately, reports Nick Godt for MarketWatch. Yesterday’s performance in India only furthered the good feelings toward those markets. Some caution that the rally might be overdone, so be sure to watch the trend lines for hints.

A potential trader may look at the whole of the emerging markets through ETFs such as EEM, or one may pick out individual countries to satiate one’s investment pangs.

Current emerging markets above their trend lines include:

• SPDR S&P China (GXC): up 27.3% year-to-date

• iShares MSCI Taiwan Index (EWT): up 40.1% year-to-date

• iShares MSCI Singapore Index (EWS): up 24.3% year-to-date

• SPDR S&P Emerging Europe (GUR): up 29.9% year-to-date

• iShares MSCI Mexico Investable Mkt Idx (EWW): up 12.6% year-to-date

• Market Vectors Russia (RSX): up 59.3% year-to-date

For full disclosure, some of Tom Lydon’s clients own shares of GXC.

Max Chen contributed to this article.

In the past, Latin American countries like Argentina, Bolivia and Ecuador have all publicly denounced the IMF, write Juan Forero and Joshua Partlow for The Washington Post. The treasuries of Latin American countries were also full from being nations rich in resources and commodities.

After being thrashed by the financial crisis, these countries are now softening up to the IMF assistance. The IMF is the only source that is able to provide copious amounts of cash to aid seeking countries.

Economists estimate that Ecuador needs as much as $2 billion to help bridge a $3.5 billion trade deficit. More recently, Colombia, Costa Rica, El Salvador and Guatemala are queuing up for loans, and Mexico is getting $47 billion.

In Brazil, the pace of rate cuts is slowing as more signs that the crisis is backing off have emerged, report Joshua Goodman and Andrew Soliani for Bloomberg. The country recently experienced its deepest quarterly contraction on record, but companies are now re-hiring workers and car sales jumped 17% in March.

In Mexico, the deadly influenza has reduced consumer shopping, reports Ken Jones for The Wall Street Journal. For a couple of weeks and possibly longer, if the flu drags on indefinitely, the travel, tourism and entertainment sectors could be negatively affected.

Retail sales were down 8.6% in February compared to the same month last year. Economists had previously projected a 3.3% contraction in the economy.

• iShares S&P Latin America 40 Index (ILF): up 18% year-to-date

• iShares MSCI Mexico Investable Mkt Idx (EWW): down 1.2% year-to-date

Max Chen contributed to this article.

Mexico’s economy is set to shrink 2.8% this year based upon falling exports, underscoring the deep troubles that led it to seek help from the International Monetary Fund. Miguel Angel Gutierrez for Forbes reports that Mexican factories that make everything from cars to vacuum parts are reeling from the dropoff in orders from the United States, where the economy has contracted sharply in recent months.

This forecast was much more bleak than a previous outlook for a 1% contraction in 2009 and was roughly in line with private-sector views. Meanwhile, Mexico’s Felipe Calderon faces a defeat in mid-term elections that could hobble the rest of his presidency. He is also trying to stave off the recession while dealing with deadly drug gangs.

Since he took power in late 2006 and launched a war on drug cartels, drug killings have skyrocketed and not much has improved, says Catherine Bremer for Forbes. The global financial crisis is now spilling over the borders and into the country. Getting control of this situation will be imperative for this country’s growth and stability.

President Barack Obama is readying for a visit to the country on Thursday in a show of support in Calderon’s efforts to fight the drug violence, David Alexander reports for Reuters.

• iShares MSCI Mexico Investable Market Index (EWW): up 0.5% year-to-date