Emerging markets exchange traded funds (ETFs) have been superstars lately. However, these areas can be laden with volatility. For those looking to invest in larger companies to hopefully offset some of the riskiness, consider the PowerShares FTSE RAFI Emerging Markets (PXH). PHX tracks the FTSE RAFI Index that follows the largest companies among the emerging markets based on four fundamental factors of firm size such as book value, cash flow, sales and dividends, reports Zoe Van Schyndel for The Motley Fool. The expense ratio for PXH is also on the larger end at 0.85%.
Countries who make up the assets are usual suspects like Brazil, China and South Korea. Financials and telecommunications make up around half, while energy and materials also place high. Top stocks include Rostelecom (ROS), Posco (PKX), and PetroChina (PTR). PXH’s main competitors include the iShares Emerging Markets Index (EEM) and the Vanguard Emerging Markets Stock ETF (VWO).
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.