EM Rout Puts New Breed of ETFs in the Spotlight

Bloomberg reports $675 has come into the WisdomTree Emerging Markets SmallCap Dividend Fund (NYSEArca: DGS) over the past year, a sign that investors want to be compensated for taking on emerging markets risk. DGS is heavy on lower beta developing markets as Taiwan, South Korea and Malaysia combine for over 48% of the ETF’s weight.

The EGShares Emerging Markets Consumer ETF (NYSEArca: ECON) “attracted $556 million in the past 13 months,” according to Bloomberg. ECON was inflow positive last year even as EEM and VWO bled billions in assets, a theme that has carried over into 2014. [These Emerging Markets ETFs Are Gaining Cash]

ECON is the largest EGShares ETF and is the case with many of the firm’s funds, ECON is light on South Korea and Taiwan exposure.  South Africa, Mexico, China and Brazil combine for nearly 56% of ECON’s weight.

iShares Core MSCI Emerging Markets ETF

Tom Lydon’s clients own shares of EEM.