State-Run Companies Lift Obscure Energy ETF

It is not the largest exchange traded fund tracking the energy sector. In fact, it is one of the smallest, but the iShares MSCI Emerging Markets Energy Capped ETF (NYSEArca: EMEY) has recently been a solid performer thanks to the resurgence of state-controlled energy giants throughout the developing world.

EMEY, which tracks the MSCI EM Energy 25-50 Index, will not impress on size alone. The fund has just $1.88 million in assets under management, but it jumped 5.2% Wednesday, bringing its three-month gain to 10.4%. That compares favorably with some of the more popular ETFs offering energy sector exposure. [Stick With Energy ETFs]

EMEY has been bolstered by the very state-run energy companies that have previously been a drag on emerging markets ETFs ranging from diversified funds to single-country offerings such as the Global X FTSE Colombia 20 ETF (NYSEArca: GXG) and the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ).

Speaking of Brazil and Colombia, EMEY’s exposure to Petrobras (NYSE: PBR) and Ecopetrol (NYSE: EC) has proven beneficial. Shares of Petrobras have surged 35% in the past 90 days while Colombia’s Ecopetrol has seen its American depositary receipts jump gain 2% over the same time. The two stocks combine for 13.6% of EMEY’s weight.

EMEY has also remained sturdy despite a 26.5% weight to Russia, making it the ETF’s largest country weight. Gazprom is by far EMEY’s largest holding with a weight of 10.3% and Lukoil checks in at the fifth spot with an allocation of 6%.