Seeking Alpha

"Why are you excluding the small cap space," asks Index Universe's Matt Hougan of the two...

"Why are you excluding the small cap space," asks Index Universe's Matt Hougan of the two largest emerging markets ETFs (EEM, VWO). His top pick for the space is the new iShares Core MSCI Emerging Markets ETF (IEMG). It offers small cap exposure with expenses (0.18%) way-below its big-brother EEM, and even less than Vanguard's VWO. (earlier from the IU Conference)
Comments (3)
  • DJ Sandcastle
    , contributor
    Comments (41) | Send Message
     
    Hi Matt

     

    I looked at the profie for IEMG on Yahoo and it said Large, Medium and Small cap - so appears not only small cap - hope I read it correctly.

     

    On a seperate issue - I invest in Emerging markets using EM Futures. I use MXEF (symbol on Interactive Brokers). Initial margin is about 5%. Daily volume is good for a small player like myself - say at least 1.5m contracts at $50 000 per contract = $100 million.
    With 5% down, I can invest the 95% balance in the money market, instead of putting down the 100% on the EEM or IEMG etf. Also the Futures electronic trading hours are longer than for the etf's. Rollover is 4 times a year, but the broker fees are tiny - $1.80 per contract to buy and to sell - so that's $1.80 x 2(buy and sell) x 4(times a year) = $14.40 pa. IEMG's pa expenses are .18%, which is .0018 on an equivalent $50 000 future contract, which is $90, versus $14.40 for holding onto a $50 000 futures contract by rolling it 4x a year. And that's before the interest I earn on the money market on the 95%.

     

    I'd appreciate your critical review of how I trade Emerging Markets.
    11 Feb 2013, 10:55 AM Reply Like
  • comalley
    , contributor
    Comments (5) | Send Message
     
    also, it looks like IEMG doesn't even have individual names in India. They are just investing in Ishares there.
    11 Feb 2013, 11:22 PM Reply Like
  • comalley
    , contributor
    Comments (5) | Send Message
     
    IEMG has larger median mkt cap than the other 2:

     

    IEMG MEDIAN MKT CAP IS $19B
    EEM median mkt cap is $18B
    VWO median mkt cap is $14.7B
    11 Feb 2013, 11:25 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|