TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.
Exchange traded funds with diverse holdings in emerging markets outperformed "BRIC" investments in the three-month rally that began in March.
Three emerging market ETFs, in the table below, surged as much as 78% in the three months through May. The three best BRIC funds -- with holdings in Brazil, Russia, India and China -- posted gains of up to 70%.
The BRICs were held back by more concentrated investments. While three of the four countries performed well, a single lagging market hobbled results.Energy and basic materials powered all six of the funds. The SPDR Emerging Europe ETF (GUR) has 50% of its assets in Eastern European energy stocks, two-thirds of which are in Russia. Top holdings include energy giants Lukoil Holdings, Gazprom and Rosneft. Energy was a major driver in the returns of the three BRIC funds. It's the largest sector in each, making up 33% of the value of the SPDR S&P BRIC ETF (BIK), 28% of the iShares MSCI BRIC Index Fund (BKF) and 25% of Claymore/BNY BRIC ETF (EEB). Still, the BRICs are down by more than a third over the past 12 months, as oil is at half the level of a year ago. The energy-heavy SPDR S&P Emerging Europe ETF has fallen by about 50%. The best-performing non-leveraged ETF during the three-month rally was the Market Vector Russia ETF RSX, up 110% for the period. It was followed closely by Claymore/AlphaShares China Real Estate (TAO) and iPath MSCI India Index ETN (INP), both of which surged more than 90%. But the fact that the best-performing Brazilian ETF, iShares MSCI Brazil (EWZ), was far down the list with an advance of 61% shows that one underperformer can put a drag on returns.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV