Options action in iShares Emerging Markets (NYSEArca: EEM) suggests traders are positioning for additional upside in the near term after the 7% run-up we’ve seen already this week in the exchange traded fund.
This presents an opportunity to focus on a newer entry to the ETF landscape, IndexIQ Emerging Markets Mid Cap (NYSEArca: EMER).
Where EEM is noticeably large cap oriented (with 40% of its holdings classified as meg- cap or giants, and 35% as large caps), EMER offers unique exposure to the mid cap space of emerging markets equities.
EMER also has less exposure to BRIC (Brazil, Russia, India, China) equities than many of the larger cap oriented emerging markets ETFs that most investors are familiar with.
While very new to the market, having debuted in mid-July, trading volume has been limited thus far in the product, but liquidity is present with or without the volume here due to the nature of the underlying equity index.
We will continue to watch EMER’s performance closely against many of its peers in the category are generally heavily weighted toward the large caps.
IndexIQ Emerging Markets Mid Cap
Chart source: StockCharts.com.
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