While PIE is not an actively managed ETF, its underlying index offers more flexibility in terms of quarterly country changes than investors are accustomed to seeing with an ETF such as the iShares MSCI Emerging Markets ETF (NYSEArca: EEM).
That also means staying abreast of PIE’s country allocations is a worthy endeavor. Translation: What is not in the ETF is often just as important as what is. PIE is underweight China compared to the MSCI Emerging Markets Index by nearly 700 points and the ETF currently features no exposure to Russian equities.
Although its weight these countries are not large on an individual basis, PIE does allocate a combined 24% of its weight to Thailand, Indonesia, the Philippines and Malaysia. On an individual basis and in aggregate, that is an overweight position to those countries compared to EEM. And that is a plus at a time when the single-country ETFs tracking those nations, Indonesia and the Philippines in particular, are surging. [Philippines ETF in Rally Mode Again]
PowerShares DWA Emerging Markets Momentum Portfolio
Tom Lydon’s clients own shares of EEM.