Proving that momentum should not be confused with high beta, PIE’s largest country is 21.5% to South Korea, one of the least volatile emerging markets. The ETF’s third-largest country weight, Taiwan at 13.9%, is also one of the least volatile developing markets. [South Korea ETFs Get Some Love]
“As with any relative strength strategy, one of the keys to good performance over time is having sufficient dispersion in the investment universe and as shown below, there has been plenty of dispersion in Emerging Markets! The chart below shows the trailing 12 month performance for the 1,000 Emerging Market stocks from which we select our stocks for PIE. The best stock was up 389% over this period of time and the worst stock was down a mere 82%,” notes Dorsey Wright.
The Philippines is PIE’s second-largest country weight at 16.3%, making the ETF home to the largest weight to that country among diversified emerging markets funds. The MSCI Emerging Markets Index allocates just 1.3% to the Philippines.
PowerShares DWA Emerging Markets Momentum Portfolio