We have spent some time recently speaking about the genesis of innovative ETF indexing ideas in the emerging markets equity space, and one opportunity that we have not covered yet is EGShares Emerging Markets High Income/Low Beta (NYSEArca: HILO).
HILO is based on the INDXX Emerging Markets High Income Low Beta Index which is constructed as a 30 stock index, weighted by dividend yield, that aims to provide higher yield and lower (beta) volatility levels than comparable emerging markets indices that are market capitalization weighted (such as the MSCI Emerging Markets Index).
From a country diversification standpoint, the current top five weightings of HILO are Malaysia (18.00%), South Africa (17.27%), Brazil (13.41%), China (12.66%), and Thailand (8.85%).
What is noticeable is the lack of Russia and India within the top five weightings, as most in the industry are used to “emerging markets” and the “BRICs” going hand in hand. [ETF Chart of the Day: Emerging Markets]
From a sector standpoint, top weightings are wireless telecom (14.77%), diversified telecom (13.89%), and oil & gas (7.93%).
EGShares Emerging Markets High Income/Low Beta
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