Emerging-market exchange traded funds (ETFs) have been popular lately because of their generally strong performance over the past few years. The great thing about emerging-market ETFs is that there is wide selection; almost every ETF provider offers one, as Gary Gordon for ETF Expert notes. Yet, with many choices comes responsibility; investors need to look at the options and see what, if any, meet their financial goals. One way to tell them apart is through their country holdings. Here’s a comparison:
- Vanguard Emerging Markets Stock ETF (VWO)
South Korea dominates this ETF at 15.1%. Taiwan is next at 12.4%, followed by Hong Kong at 10.9%, Brazil at 9.4% and South Africa at 7.6%. VWO is currently up 18.4% year-to-date.
- SPDR S&P Emerging markets (GMM)
GMM is equally heavy in Brazil and Hong Kong at 12.0%. Next comes South Africa at 8.9%, Taiwan at 6.6% and India at 6.3%. Having launched in March, GMM is currently up 6.3% over the last three months.
- iShares MSCI Emerging Markets (EEM)
South Korea also is the largest holding in EEM at 15.8%. However, it differs from VWO in its lower holdings. Hong Kong gets 12.2%, Brazil has 11.6%, Taiwan gets 9.6% and South Africa at 8.4%. EEM is up 14.2% year-to-date.
- WisdomTree Emerging Markets High-Yielding Equity Fund (DEM)
This ETF invests a whopping 27.8% in Taiwan, followed by 11.3% in Brazil, 9.3% in Korea, 8.7% in South Africa and 8.2% in Thailand. DEM just launched in July, which was bad timing, so it’s down 5.0% over the last month.
For full disclosure, some of Tom Lydon’s clients own EEM.
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.