Although BIK is up more than 2% this month, the ETF is being hampered by large exposure to state-run firms. Additionally, Tencent, China’s largest Internet company, is BIK’s largest holding at 8.2%, which has been a disadvantage for the ETF in recent weeks. [Tencent Weighing on These ETFs]
The $175.9 Guggenheim BRIC ETF (NYSEArca: EEB) is India light (just 10.3%) and Brazil heavy (almost 30.5%). EEB’s 27.7% weight to Russia is large among multi-country emerging markets ETFs, the fund’s large Brazil and energy sector exposure should prove advantageous assuming Petrobras (NYSEArca: PBR) continues its recently established leadership role among Brazilian large-caps. Some help from Russian state-run energy giants would be appreciated as two are found among EEB’s top-10 holdings. [Is There Value in Russia ETFs]
Investors can also leave Russia behind will keep the other BRIC countries with the First Trust BICK Index Fund (NasdaqGM: BICK). The “K” in BICK stands for South Korea, which given that country’s reputation for being one of the least volatile emerging markets, helps damp BICK’s volatility relative to rival funds. BICK subscribes to an equal weight methodology to ensure each country accounts for 25% of the fund’s weight. It is up 4.7% this month.
iShares MSCI BRIC ETF
Tom Lydon’s clients own shares of EEB.