Take a Piece of PowerShares' Emerging Markets Technical Leaders Pie

Powershares DWA Emerging Markets Technical Leaders Portfolio ETF (PIE) is fairly new - its inception date was December 28th 2007. It is based on an index from Dorsey Wright and includes about 100 emerging market companies which are showing relative strength compared to their peers.

I believe it has several factors in its favor. First, as of today, it has over 26% of its portfolio in Indonesia. Since there are no pure-play Indonesia ETFs in existence, this is a nice way to have exposure to that country. It also has over a 23% exposure to Malaysia. Why is there so much exposure to those two countries? Remember that the index is based on relative strength. It has only a 13% exposure to financials. And what has been strong recently? Natural resources (35% of the fund is in energy and materials stocks). Both Indonesia and Malaysia are loaded with natural resource companies.

Look at some of the largest positions in this ETF. The top position is Timah, an Indonesian tin mining company and one of the largest in the world. Other large positions include Bumi Resources, which is the Asia's largest producer and exporter of thermal coal, and a plantation stock, Sinar Mas Agro.

PIE should be on many investors' dinner plates with its exposure to both natural resources and Asia.

Disclosure: none

Comments

[Fred Swartz:]

Thanks for pointing this out and it will be interesting to watch it. However, despite the good story it hasn't done better than EEM.

2008 Mar 10 10:25 AM

[Lawrence York:]

Credit Suisse has had the Indonesia Fund (IF) available since 1990. It has outperformed the EEM but has a higher Beta related to its sole focus on one country.

2008 Mar 24 11:30 AM

[Tony Daltorio:]

The Indonesia Fund is a closed-end fund(not an ETF) which has a history of trading at a premium to its net asset value.Why pay a premium?

2008 Mar 30 05:21 PM