This Day On The Street
Continue to site
ADVERTISEMENT
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

Emerging Market ETFs Reclaiming Higher Road

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( ETF Expert) -- In "Why Russia ETFs Are Receiving So Much Love," I discussed several reasons for the recent investment success. They included: (1) non-OPEC oil and gas exposure during Middle East rebellions, (2) large weighting in iron/steel for Japan's rebuilding, and (3) substantial GDP contribution by Russia to global growth.

Yet Russia isn't the only BRIC component that's been traveling a comeback trail. Shortly after the Libyan uprising in late February, I pointed out that emerging markets had been "hanging in" better than developed world markets. And that was before Japan's earthquake, tsunami and nuclear crisis. (See "Emerging Regions Are Recovering More Ground Than Developed Regions" )

Now, the researchers at Bespoke are confirming a familiar pattern in equities. Specifically, emerging market stocks tend to "peak" before developed country stocks; then, emergers "bottom out" before developed country stock assets; then, emerging equities "recover" before developed world equities.

Here are the month-over-month returns for popular BRIC component ETFs versus popular developed country ETFs:

Calendar-year trackers may not view these differences as substantial. After all, year-to-date percentage gains/losses still appear to confirm the superiority of U.S. Stock ETFs.

On the other hand, contrarians have taken notice of the massive outflows from Emerging Market ETFs in 2011. Has the "smart money" been exiting? Or has the crowd been chasing returns because emergers began to flounder in November of 2010?

The answer is not a simple one. Recent outperformance by emergers may simply indicate smaller losses in the near-term, rather than big-time bullish gains around the corner. After all, the Guggenheim BRIC Fund (EEB)has hit "lower lows" in February and in March. It's also below its 50-day moving average.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
SYM TRADE IT LAST %CHG
EEB $31.45 0.00%
AAPL $131.39 0.00%
FB $80.48 0.00%
GOOG $542.51 0.00%
TSLA $245.62 0.00%

Markets

DOW 18,285.74 +0.34 0.00%
S&P 500 2,130.82 +4.97 0.23%
NASDAQ 5,090.7940 +19.0510 0.38%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs