Notable differences in the makeups of these two indexes that are evident to us are the following: AGEM does not own South Korea nor Taiwan, as it likely sees these markets as “developed” instead of emerging, and AGEM is also tilted more heavily towards China, Brazil, Russia, and South Africa than the MSCI Emerging Markets Index (which we note, is an older index and over time, definitions of which countries should be classified as emerging versus developing have been much disagreed upon and thus, innovation in the EM space has been prevalent with the release of unique indexes and ETFs from providers such as EGShares).
Even though 2012 is barely upon us, AGEM has a leg up on VWO thus far, rallying 4.84% versus VWO’s gain of 3.69%, as China and Brazil are both up over 5 and 6% respectively just this year. Although AGEM only trades on average about 7,600 shares daily, investors should not shun the product on the basis of volume alone. Top holdings within the fund include well known large caps such as OGZPY, China Mobile, AMX, PBR, ITUB, and VALE to name a few.
EGShares Dow Jones Emerging Markets Composite
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