ETF Spotlight on the EGShares Emerging Markets Consumer ETF (ECON), part of an ongoing series.
Assets: $761.3 million.
Objective: The EGShares Emerging Markets Consumer fund tries to reflect the performance of the Dow Jones Emerging Markets Consumer Titans Index, which is comprised of 30 leading emerging market companies in the consumer goods and consumer services sectors.
Holdings: Top holdings include Companhia de Bebidas das Americas Ambev 9.9%, Naspers 8.5%, Fomento Economico Mexicano SAB de CV 6.4%, Wal-Mart de Mexico 6.2% and Astra International Tbk 5.4%.
What You Should Know:
- Emerging Global Advisors sponsors the line of EGShares ETFs.
- ECON has a 0.85% expense ratio.
- The fund has 30 holdings, and the top 10 make up 57.3% of the overall portfolio.
- Sector allocations include: consumer cyclical 29.1%, telecom services 8.6%, industrials 8.0% and consumer staples 54.4%.
- As of September 30, 2012, sub-sector allocations include: beverages 16.2%, food & drug retailers 14.1%, food producers 13.3%, general retailers 12.8%, media 12.6%, automobiles 10.1%, travel & leisure 8.7%, tobacco 4.2%, personal goods 4.2% and household goods & construction 2.2%.
- Country allocations include: South Africa 19.0%, Mexico 18.6%, Brazil 17.0%, India 11.2%, Chile 9.4% and Malaysia 6.3%.
- ECON has a 0.40% 12-month yield.
- The ETF is up 7.6% over the past month, up 9.5% over the last three months and up 23.0% in the past year.
- "Given ECON's concentrated exposure to large, well-established firms, this ETF's underlying index has been less volatile than the MSCI Emerging Markets Index and has delivered significantly better risk-adjusted returns over the last five years," according to Morningstar analyst Patricia Oey.
- "The fund's thesis is a logical one: Emerging-markets consumers increasingly are reaching middle-class status and have more disposable income to spend on everything from cars and electronic gadgets to processed foods and beverages," Oey added.
The Latest News:
- Emerging market equities have seen large inflows as uncertainty leading up to the fiscal cliff pushed investors to overseas markets.
- Nevertheless, emerging market stocks paused Thursday as the initial euphoria over the budget deal waned.
- "After a day of euphoria like yesterday, investors are stopping to think," Aloisio Villeth Lemos, an analyst with Agora Corretora in Rio de Janeiro, said in a Reuters article. "There are still things that need to be straightened out in the U.S."
- Analysts expect investors to remain cautious ahead of the upcoming talks over debt limit and spending cuts in the months ahead.
EGShares Emerging Markets Consumer ETF
Max Chen contributed to this article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.