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

EMB Crosses Above Key Moving Average Level
Fri, Mar 24, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the iShares J.P. Morgan USD Emerging Markets Bond ETF ...

Zoetis Moves Up In Analyst Rankings, Passing Alphabet
Fri, Mar 24, 11:54 AM ET, by ETF Channel

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

VNQ, PSA, PLD, EQIX: ETF Inflow Alert
Fri, Mar 24, 11:14 AM ET, by ETF Channel

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

EMB: Large Inflows Detected at ETF
Fri, Mar 24, 11:14 AM ET, by ETF Channel

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

IAU: Large Inflows Detected at ETF
Fri, Mar 24, 11:14 AM ET, by ETF Channel

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

IWF, BA, CELG, BMY: ETF Inflow Alert
Fri, Mar 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWF, BA, CELG, BMY Exchange traded funds (ETFs) trade just ...

WisdomTree Japan Hedged Equity Fund Experiences Big Outflow
Fri, Mar 24, 11:14 AM ET, by ETF Channel

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

DIA, TRV, UTX, AXP: ETF Outflow Alert
Fri, Mar 24, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: DIA, TRV, UTX, AXP Exchange traded funds (ETFs) trade just ...

VXF, TSLA, LBTYA, LVS: Large Outflows Detected at ETF
Fri, Mar 24, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VXF, TSLA, LBTYA, LVS Exchange traded funds (ETFs) trade just ...

IYF, CB, MS, AIG: ETF Outflow Alert
Fri, Mar 24, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IYF, CB, MS, AIG Exchange traded funds (ETFs) trade just ...

VBK, SIVB, FANG, CDNS: Large Outflows Detected at ETF
Fri, Mar 24, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VBK, SIVB, FANG, CDNS Exchange traded funds (ETFs) trade just ...

UBSI Crosses Above Average Analyst Target
Fri, Mar 24, 10:24 AM ET, by ETF Channel

In recent trading, shares of United Bankshares Inc (UBSI) have crossed above the average analyst ...

BCOR Crosses Above Average Analyst Target
Fri, Mar 24, 10:24 AM ET, by ETF Channel

In recent trading, shares of Blucora, Inc. (BCOR) have crossed above the average analyst 12-month ...

Implied XPH Analyst Target Price: $53
Fri, Mar 24, 10:24 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Wolverine World Wide Reaches Analyst Target Price
Fri, Mar 24, 10:14 AM ET, by ETF Channel

In recent trading, shares of Wolverine World Wide, Inc. (WWW) have crossed above the average ...

Implied PXJ Analyst Target Price: $14
Fri, Mar 24, 10:14 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Atmos Energy Reaches Analyst Target Price
Fri, Mar 24, 10:14 AM ET, by ETF Channel

In recent trading, shares of Atmos Energy Corp. (ATO) have crossed above the average analyst ...

WNC Crosses Above Average Analyst Target
Fri, Mar 24, 10:14 AM ET, by ETF Channel

In recent trading, shares of Wabash National Corp. (WNC) have crossed above the average analyst ...

Hyster-Yale Materials Handling Reaches Analyst Target Price
Fri, Mar 24, 10:14 AM ET, by ETF Channel

In recent trading, shares of Hyster-Yale Materials Handling Inc (HY) have crossed above the average ...

REZ Makes Bullish Cross Above Critical Moving Average
Thu, Mar 23, 11:24 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares Residential Real Estate Capped ETF (REZ) crossed ...

FTSL Crosses Below Key Moving Average Level
Thu, Mar 23, 11:24 AM ET, by ETF Channel

In trading on Thursday, shares of the First Trust Senior Loan Fund ETF (FTSL) crossed ...

VTI, VIS, HON, AVGO: ETF Outflow Alert
Thu, Mar 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VTI, VIS, HON, AVGO Exchange traded funds (ETFs) trade just ...

XOP, RICE, CPE, EGN: Large Inflows Detected at ETF
Thu, Mar 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XOP, RICE, CPE, EGN Exchange traded funds (ETFs) trade just ...

Experiences Big Outflow
Thu, Mar 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XME, HL, RGLD, CDE Exchange traded funds (ETFs) trade just ...

IYW, AMAT, YHOO, HPE: Large Outflows Detected at ETF
Thu, Mar 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IYW, AMAT, YHOO, HPE Exchange traded funds (ETFs) trade just ...

VBR, HII, TRGP, CDW: Large Outflows Detected at ETF
Thu, Mar 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VBR, HII, TRGP, CDW Exchange traded funds (ETFs) trade just ...

VDE's Holdings Imply 20% Gain Potential
Thu, Mar 23, 9:44 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Add Up The Parts: FNI Could Be Worth $35
Thu, Mar 23, 9:44 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

We Did The Math ZMLP Can Go To $20
Thu, Mar 23, 9:34 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

The Math Shows PXSG Can Go To $31
Thu, Mar 23, 9:34 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Implied ACTX Analyst Target Price: $16
Thu, Mar 23, 9:34 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

IHE's Underlying Holdings Could Mean 24% Gain Potential
Thu, Mar 23, 9:34 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

PPL Crosses Above Average Analyst Target
Thu, Mar 23, 9:34 AM ET, by ETF Channel

In recent trading, shares of PPL Corp (PPL) have crossed above the average analyst 12-month ...

T-Mobile US Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of T-Mobile US Inc (TMUS) have crossed above the average analyst ...

Autoliv Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of Autoliv Inc. (ALV) have crossed above the average analyst 12-month ...

Platform Specialty Products Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of Platform Specialty Products Corp (PAH) have crossed above the average ...

LATAM Airlines Group Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of LATAM Airlines Group SA (LFL) have crossed above the average ...

Alliant Energy Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of Alliant Energy Corp (LNT) have crossed above the average analyst ...

RH Reaches Analyst Target Price
Thu, Mar 23, 9:24 AM ET, by ETF Channel

In recent trading, shares of RH (RH) have crossed above the average analyst 12-month target ...

The NBLX Paradox: Analysts Bullish But Forecast -3.8% Fall
Thu, Mar 23, 9:24 AM ET, by ETF Channel

Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a ...

XES, WFT, CLB, PTEN: ETF Outflow Alert
Wed, Mar 22, 12:14 PM ET, by ETF Channel

Symbols mentioned in this story: XES, WFT, CLB, PTEN Exchange traded funds (ETFs) trade just ...

VO, FISV, APH, ROP: ETF Inflow Alert
Wed, Mar 22, 12:14 PM ET, by ETF Channel

Symbols mentioned in this story: VO, FISV, APH, ROP Exchange traded funds (ETFs) trade just ...

HDV, RAI, KMB, AEP: ETF Inflow Alert
Wed, Mar 22, 12:14 PM ET, by ETF Channel

Symbols mentioned in this story: HDV, RAI, KMB, AEP Exchange traded funds (ETFs) trade just ...

SPDR EURO STOXX 50 ETF Experiences Big Inflow
Wed, Mar 22, 12:14 PM ET, by ETF Channel

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

IEI: ETF Outflow Alert
Wed, Mar 22, 12:14 PM ET, by ETF Channel

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

MLPA Crosses Critical Technical Indicator
Wed, Mar 22, 11:54 AM ET, by ETF Channel

In trading on Wednesday, shares of the MLP ETF (MLPA) entered into oversold territory, changing ...

PSCF Crowded With Sellers
Wed, Mar 22, 11:54 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares S&P SmallCap Financials Portfolio ETF (PSCF) entered ...

USMV, BDX, SYK, PAYX: ETF Outflow Alert
Wed, Mar 22, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: USMV, BDX, SYK, PAYX Exchange traded funds (ETFs) trade just ...

12.3% of VTWV Holdings Seeing Recent Insider Buys
Wed, Mar 22, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Russell 2000 Value ETF (VTWV) ...

The FII Paradox: Analysts Bearish But Forecast 11.84% Gains
Wed, Mar 22, 9:14 AM ET, by ETF Channel

Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a ...

  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 - 2017, 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 serious 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.