This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Two ETFs, Two Routes to China's Highways

NEW YORK (TheStreet) -- If you invest in emerging markets, you know that one of the catalysts for growth is the modernization of infrastructure in China, India and Africa. Because of this dynamic, there are exchange-traded funds that target emerging-market infrastructure.

Despite their similar names, the iShares S&P Emerging Markets Infrastructure Index Fund (EMIF) and the PowerShares Emerging Markets Infrastructure Portfolio (PXR) are quite different.

The iShares fund is much closer to what its name implies. It owns Chinese toll-road stocks, Brazilian utilities and even a phone stock listed in Prague. The PowerShares fund targets the companies that are building and updating the roads and utilities, including shares of companies in developing nations and those of companies based in the U.S., Switzerland and France that do business in emerging markets.

The iShares fund makes larger bets at the county level, allocating 29% to China and 27% to Brazil will smaller stakes in places like Chile and Indonesia. The PowerShares allocates 17% to China and 10% each to South Africa and Brazil, with an additional 20% in the three developed countries mentioned above.

The sector make-up is also much different between the two. The largest sector in the iShares fund is utilities at 30%, followed by transportation infrastructure (toll-road operators and airports) at 27%. The industry weightings get much smaller from there. Toll-road companies and airports are typically categorized in the industrial sector, but many of the stocks trade more like high-yielding utility stocks. You could make the argument that almost 60% of the fund is in utility or utility-like stocks.

The PowerShares fund allocates 57% to industrial stocks (no toll roads or airports) and 40% to materials stocks with only 2% in utilities. Materials companies provide the cement, steel and copper needed to complete the building process.

There are very few names in the iShares fund that will be familiar to the typical investor, but there are quite a few recognizable stocks in the PowerShares fund, including Caterpillar (CAT), ABB (ABB), Vale (VALE) and Foster Wheeler (FWLT). Despite the fact that the funds target the same concept they have no holdings in common. Their trading correlation, however, is quite high at 0.96, according to ETFreplay.com.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,445.53 -117.77 -0.71%
S&P 500 1,920.20 -10.47 -0.54%
NASDAQ 4,334.6890 -35.0840 -0.80%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs