Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

Get Rid Of Your Emerging Market ETF Volatility Problem Once And For All

Wed, Dec 5, 8:16 AM ET, by Michael Johnston

Emerging markets offer the potential for stellar returns during times of prosperity, however, they can also fall victim to rampant profit-taking when global markets encounter turbulence; at the first sign of economic uncertainty, emerging markets are usually among the first to sell off as investors scale back on risk exposure. Luckily, the expansion of the ETF universe has spawned several products that make it easy for investors to tap into lucrative growth opportunities overseas without incurring more volatility than they can stomach [see 1,400+ ETFdb Realtime Ratings].

Below we outline five ETFs that will help you get rid of your emerging market ETF volatility problem once and for all:

MSCI Emerging Markets Minimum Volatility Index Fund (EEMV)

This ETF aims to reflect the performance characteristics of a minimum variance strategy applied to large and mid cap equities across 21 emerging-market countries. Highlighting financial services, consumer defensive and communication corporations, EEMV has shown lower beta and volatility characteristics than its parent, the MSCI Emerging Markets Index (EEM). The graph below shows EEMV in green consistently outperforming EEM, while also featuring a smoother trend.

EEM vs. EEMV

 

S&P Emerging Markets Low Volatility Portfolio (EELV)

This index is designed to measure the performance of the 200 least volatile stocks from the S&P Emerging BMI Index, resulting in large holdings in financial services, industrials and utilities. Malaysia, South Africa and Taiwan are home to more than 50% of the firms, with minority representations for Latin American giants Brazil, Chile and Mexico. Since inception in January 2012, EELV has consistently outperformed GMM and maintained a positive return [see Free Report: How To Pick The Right ETF Every Time].

GMM vs EELV

 

Low Volatility Emerging Markets Dividend ETF (HILO)

This ETF follows a dividend-yield-weighted index that includes 30 stocks and is structured to deliver higher yields and lower volatility than market-cap-weighted emerging market indexes. Evenly representing all sectors, this fund is focused on South Africa, Turkey, India and China for high dividend securities. Compared to EMM, this ETF has not created such high returns, but it does feature fewer price swings.

EMM vs HILO

 

Region And Country-Specific Options

When looking for low volatility, most funds try to diversify their holdings, but others looking for niche markets stick to a specific region or country. These funds are a more difficult play because even though they are more stable than country-specific equity ETFs, they are more likely to fall prey to poor country conditions.

China Trendpilot ETN (TCHI)

RBS’s family of “TrendPilot” exchange-traded notes offers investors exposure to a dynamic trading strategy applied across a variety of asset classes. Each fund tracks a rules-based index that strategically shifts allocations based on a simple historical moving average, so when RBS's underlying index, China Treadpilot Index, is at or above its 100-day simple moving average, the fund goes long the underlying securities. If, however, the index closes below the simple moving average for five consecutive sessions, the ETF will shift exposure to "safer" short-term U.S. Treasuries. Compared to the FTSE China 25 Index Fund (FXI), TCHI is much more stable (excluding a pricing failure in November), but neither have shown positive returns in 2012.

FXI vs TCHI

Direxion S&P Latin America 40 RC Volatility Response Shares Holdings (VLAT)

Direxion debuted a suite of volatility response ETFs in early 2012 (including VLAT) that are designed to adjust exposure to stock market depending on currency conditions. When the markets are experiencing high levels of volatility, many investors may choose to shift their exposure towards less risky securities, such as Treasury bills. During periods of low volatility, a larger tilt towards risky asset classes may prove to be quite lucrative, as seen below. Compared to the Latin America 40 Index Fund (ILF), this ETF features not only more stable returns, but also higher returns. Like FXI and TCHI, neither have shown positive returns since early 2012.

ILF vs VLAT

[For more actionable ETF investment ideas, sign up for the free ETFdb newsletter]

Disclosure: No positions at time of writing.

Click here to read the original article on ETFdb.com.


SDI Glossary: "price" Definition
SDI Glossary: "Dividend" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "Option" Definition
SDI Glossary: "Trend" Definition
SDI Glossary: "Volatility Index " Definition
This Article's Word Cloud:   China   Compared   EELV   EEMV   ETFdb   ETFs   Emerging   Fund   Index   Latin   Markets   TCHI   This   VLAT   Volatility   also   average   below   consistently   country   emerging   exposure   five   fund   high   index   investors   lower   market   markets   more   moving   neither   positive   returns   securities   shift   shown   sign   simple   stable   stocks   than   that   they   this   underlying   volatility   when   will

| More

IRV Crosses Critical Technical Indicator
Fri, Sep 19, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the SPDR S&P International Materials Sector ETF (IRV) entered ...

TUR Makes Notable Cross Below Critical Moving Average
Fri, Sep 19, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the iShares MSCI Turkey ETF (TUR) crossed below their ...

AGZ Crosses Below Key Moving Average Level
Fri, Sep 19, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the iShares Agency Bond ETF (AGZ) crossed below their ...

RYE Crosses Below Key Moving Average Level
Fri, Sep 19, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the Guggenheim S&P 500 Equal Weight Energy ETF (RYE) ...

RWX Makes Notable Cross Below Critical Moving Average
Fri, Sep 19, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the SPDR Dow Jones International Real Estate ETF (RWX) ...

General Growth Properties Takes Over #37 Spot From Union Pacific
Fri, Sep 19, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

SPDR S&P Emerging Markets Dividend (EDIV) Shares Cross Below 200 DMA
Fri, Sep 19, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the SPDR S&P Emerging Markets Dividend ETF (EDIV) crossed ...

Vanguard REIT ETF Experiences Big Outflow
Fri, Sep 19, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VNQ, PSA, PLD, AVB Exchange traded funds (ETFs) trade just ...

TBT: ETF Outflow Alert
Fri, Sep 19, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TBT Exchange traded funds (ETFs) trade just like stocks, but ...

TIP: ETF Outflow Alert
Fri, Sep 19, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TIP Exchange traded funds (ETFs) trade just like stocks, but ...

GDX, GG, ABX, NEM: Large Outflows Detected at ETF
Fri, Sep 19, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: GDX, GG, ABX, NEM Exchange traded funds (ETFs) trade just ...

11.9% of XRT Holdings Seeing Recent Insider Buys
Fri, Sep 19, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Retail ETF (XRT) shows ...

Federal Realty Investment Trust a Top Ranked SAFE Dividend Stock With 2.9% Yield (FRT)
Fri, Sep 19, 9:24 AM ET, by ETF Channel

Federal Realty Investment Trust (FRT) has been named to the Dividend Channel ''S.A.F.E. 25'' list, ...

Texas Instruments a Top Socially Responsible Dividend Stock With 2.8% Yield (TXN)
Fri, Sep 19, 9:24 AM ET, by ETF Channel

Texas Instruments Inc. (TXN) has been named a Top Socially Responsible Dividend Stock by Dividend ...

SPXU Crowded With Sellers
Thu, Sep 18, 4:34 PM ET, by ETF Channel

In trading on Thursday, shares of the Proshares UltraPro Short S&P500 ETF (SPXU) entered into ...

Shares of CCX Now Oversold
Thu, Sep 18, 4:34 PM ET, by ETF Channel

In trading on Thursday, shares of the WisdomTree Commodity Currency Strategy Fund ETF (CCX) entered ...

SEF Crowded With Sellers
Thu, Sep 18, 4:34 PM ET, by ETF Channel

In trading on Thursday, shares of the Proshares Short Financials ETF (SEF) entered into oversold ...

H & R Block Achieves #6 Analyst Rank, Surpassing Quanta Services
Thu, Sep 18, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

VCIT Crosses Critical Technical Indicator
Thu, Sep 18, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Vanguard Intermediate-Term Corporate Bond ETF (VCIT) entered into ...

Shares of ITR Now Oversold
Thu, Sep 18, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the SPDR Barclays Intermediate Term Corporate Bond ETF (ITR) ...

Industrial Select Sector SPDR Fund Experiences Big Outflow
Thu, Sep 18, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLI, UTX, BA, HON Exchange traded funds (ETFs) trade just ...

SDS Crosses Critical Technical Indicator
Thu, Sep 18, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Proshares UltraShort S&P500 ETF (SDS) entered into oversold ...

Gold Miners Getting Very Oversold
Thu, Sep 18, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Gold Miners ETF (GDX) entered into oversold territory, ...

SKF Crowded With Sellers
Thu, Sep 18, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Proshares UltraShort Financials ETF (SKF) entered into oversold ...

Coal Getting Very Oversold
Thu, Sep 18, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Coal ETF (KOL) entered into oversold territory, changing ...

IYT, FDX, UNP, KEX: ETF Inflow Alert
Thu, Sep 18, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IYT, FDX, UNP, KEX Exchange traded funds (ETFs) trade just ...

VSS, BTE, GIL, OTEX: ETF Inflow Alert
Thu, Sep 18, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VSS, BTE, GIL, OTEX Exchange traded funds (ETFs) trade just ...

Daily Small Cap Bull 3x Shares Experiences Big Inflow
Thu, Sep 18, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: TNA Exchange traded funds (ETFs) trade just like stocks, but ...

SDOW Crowded With Sellers
Thu, Sep 18, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Proshares UltraPro Short Dow30 ETF (SDOW) entered into ...

SPDR S&P Oil & Gas Exploration & Production ETF -- Insider Buying Index Registering 13.1%
Thu, Sep 18, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Oil & Gas Exploration ...

10.5% of XES Holdings Seeing Recent Insider Buys
Thu, Sep 18, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Oil & Gas Equipment ...

11.9% of RZV Holdings Seeing Recent Insider Buys
Thu, Sep 18, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Guggenheim S&P SmallCap 600 Pure Value ...

MMC Named A Top Socially Responsible Dividend Stock
Thu, Sep 18, 9:14 AM ET, by ETF Channel

Marsh & McLennan Companies Inc. (MMC) has been named a Top Socially Responsible Dividend Stock ...

EMHY Crosses Below Key Moving Average Level
Wed, Sep 17, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Emerging Markets High Yield Bond ETF (EMHY) ...

BLDRS Europe Select ADR Index Fund (ADRU) Shares Cross Above 200 DMA
Wed, Sep 17, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the BLDRS Europe Select ADR Index Fund ETF (ADRU) ...

Vanguard Intermediate-Term Bond Breaks Below 200-Day Moving Average - Notable for BIV
Wed, Sep 17, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the Vanguard Intermediate-Term Bond ETF (BIV) crossed below their ...

EPP Crosses Below Key Moving Average Level
Wed, Sep 17, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Pacific ex Japan ETF (EPP) crossed ...

SPXS Crowded With Sellers
Wed, Sep 17, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the Daily S&P 500 Bear 3x Shares ETF (SPXS) ...

Shares of ENZL Now Oversold
Wed, Sep 17, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI New Zealand Capped ETF (ENZL) entered ...

STIP Crosses Critical Technical Indicator
Wed, Sep 17, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares 0-5 Year TIPS Bond ETF (STIP) entered ...

QEP Resources Takes Over #88 Spot From Cameron International
Wed, Sep 17, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

iShares Cohen & Steers REIT ETF Experiences Big Outflow
Wed, Sep 17, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: ICF, SPG, GGP, MAC Exchange traded funds (ETFs) trade just ...

UUP: Large Outflows Detected at ETF
Wed, Sep 17, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: UUP Exchange traded funds (ETFs) trade just like stocks, but ...

ESR: Large Inflows Detected at ETF
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: ESR Exchange traded funds (ETFs) trade just like stocks, but ...

VBR, FL, TRN, RAD: Large Inflows Detected at ETF
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VBR, FL, TRN, RAD Exchange traded funds (ETFs) trade just ...

VOT, VRTX, HCN, MCO: ETF Inflow Alert
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VOT, VRTX, HCN, MCO Exchange traded funds (ETFs) trade just ...

WisdomTree Emerging Markets Equity Income Fund Experiences Big Outflow
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: DEM, KT, LUKOY, SKM Exchange traded funds (ETFs) trade just ...

DFE: Large Outflows Detected at ETF
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: DFE Exchange traded funds (ETFs) trade just like stocks, but ...

XES, DRC, EXH, HLX: ETF Outflow Alert
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XES, DRC, EXH, HLX Exchange traded funds (ETFs) trade just ...

GWL, RY.CA, TD.CA, BNS.CA: Large Outflows Detected at ETF
Wed, Sep 17, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: GWL, RY.CA, TD.CA, BNS.CA Exchange traded funds (ETFs) trade just ...

Related videos | all videos »
  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

Get Rid Of Your Emerging Market ETF Volatility Problem Once And For All | Self Directed Investor | Copyright © 2008 - 2014, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of over 1000 individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.