Conversely, EEHB is overweight some of the most controversial developing markets. Turkey, no stranger to domestic political tensions, and South Africa with one of the highest unemployment rates in the emerging world, combine for almost 34% of EEHB’s as the ETF’s two largest country weights.
The average beta on the on the iShares MSCI Turkey ETF (NYSEArca: TUR) and the iShares MSCI South Africa ETF (NYSEArca: EZA) is 1.5 compared to 0.9 for the MSCI Emerging Markets Index, according to iShares data.
EEHB’s 15.2% weight to China is about 250 basis points underweight compared to the MSCI index, but the PowerShares ETF features an 11.1% weight to Indonesia. That compares to 2.6% in the MSCI index. The higher Indonesia exposure has benefited EEHB as stocks in Southeast Asia’s largest economy have surged this year on expectations of Joko Widodo’s presidential nomination. The major Indonesia ETFs are among this year’s 10 best non-leveraged ETFs. [Indonesia ETFs Rally Ahead of Election]
PowerShares S&P Emerging Markets High Beta Portfolio
Tom Lydon’s clients own shares of EEM.