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The Philippines ETF has been trading for over 3 weeks now and is already up 4.68% as Manila stocks hit rally records. But how does that compare to exposure you could get on your own?

EPHE hit the market September 29 and has since handily outperformed the S&P 500 since then. So far, the portfolio is extremely concentrated -- top 10 holdings account for a whopping 72.77% of the assets -- but in theory, that is still better than what ADR-oriented investors could construct on their own. While there are several Philippine ADRs on the books, only two ever really trade: Philippine Long Distance Telephone (PHI) and brokerage firm SM Investments (SVTMY).

As it happens, PHI and SVTMY are the top holdings in EPHE, accounting for a full 22.5% of the portfolio, but it should be difficult to impossible for U.S. investors to buy their way into the other 77.5%. The question is what kind of unique Philippine opportunities U.S. investors are buying with their 0.65% annual expenses. On that front, so far, the added diversification has not bought anything that investors cannot get on their own via PHI and SVTMY.

Since EPHE opened, PHI has jumped 7.83% and SVTMY is up 6.22%. An investor who only bought either or both of these ADRs would be ahead of EPHE by up to 3 percentage points. Conversely, an investor who found a way to buy the 77.5% of EPHE that we have to pay the fund company to go to Manila and trade would have earned . . . 4.23%, or 3.58% after expenses.

Still, sooner or later, PHI and SVTMY will likely falter, and that's when EPHE and its added diversification will shine. With the Philippine economy surging along at a rate of around 7% growth, this will definitely be a portfolio -- and a market -- to watch.

Disclosure: No positions

Source: How Does the Philippines ETF Compare to ADR Exposure?