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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

New Emerging-Market ETFs May Not Offer Anything New

NEW YORK (TheStreet) -- ETF Provider VelocityShares, which is known primarily for levered funds and funds that track volatility and natural resources, is branching out with three new emerging-market funds:

  • VelocityShares Emerging Markets Depositary Receipt ETF (EMDR)
  • VelocityShares Russia Select Depositary Receipt ETF (RUDR)
  • VelocityShares Emerging Asia Depositary Receipt ETF (ASDR)

EMDR is a broad-based fund along the lines of the iShares MSCI Emerging Market ETF (EEM). Like many broad-based funds, EMDR has heavy weightings in Brazil (20%), South Korea (16%), Russia (15%) and China (15%).

There are also no surprises at the sector level, with energy having the largest weighting, at 21%, followed by technology, at 20%, and financials at 17%. The larger individual holdings in the fund will be familiar to most investors, but it is worth noting that Samsung is the largest holding by far, at 10% of the fund. For comparison, Samsung accounts for only a 4% weighting in EEM.

The Russian market is dominated by energy companies, so RUDR has a big weighting (43%) in energy companies. It also has percentage weightings in the midteens for financials, telecom and materials.

Like many rival funds, RUDR's largest individual holdings are Gazprom (at 21%) and Sberbank (at 14%). The weightings of these two companies are similar to their weightings in the iShares MSCI Russia Capped ETF (ERUS).


Lastly, there is ASDR, which like the other two VelocityShares funds, has plenty of competition, in this case from the iShares MSCI Emerging Markets Asia ETF (EEMA).

Not surprisingly, ASDR's largest sector weighting is technology, but the sector's weighting of 43% is greater than in EEMA. ASDR has midteen weightings in telecom, energy and financials. EEMA has a more balanced 26% in financials and 23% in tech.

South Korea is the largest country in ASDR, at 34% of the fund, followed by 30% for China and 17% for Taiwan. The thing to be careful with here is ASDR's 21% allocation to Samsung.

A loss in competition, real or perceived, to Apple (AAPL) would be devastating to ASDR, but not for EEMA, which has only a 6.5% weighting for Samsung.


The issue with these funds is that they don't bring anything new to the table for investors. As mentioned, ASDR has competition from EEMA, which only has $64 million in assets and rarely trades more than 20,000 shares. The low asset level and limited volume raises a reasonable doubt whether there is room for EEMA, let alone a second fund such as ASDR.

Stock quotes in this article: EEM, EMDR, RUDR, ASDR, ERUS 

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.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

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