This isn't a place for small fries, but SPEM is pretty spry, with annual EPS expected to grow 19%, on average, over the next three to five years. Geographically, like most of the emerging markets ETFs, the top three country allocations are China (36.0%), Taiwan (16.9%) and India (14.2%).Īs for the holdings themselves? The weighted average market cap is $105.9 billion, with the largest checking in at $535.4 billion. The top three sectors by weight are financials (19.3%), technology (16.8%) and consumer discretionary (16.3%). SPEM's top 10 holdings account for a decent 20% of the ETFs portfolio. The index is market-cap weighted and float-adjusted, which means representation in the fund is determined by the company's size, but only those shares available to the public are included in the index's calculation. The ETF tracks the performance of the S&P Emerging BMI (Broad Market Index), which is a subset of the S&P Global BMI. And a fee of just 0.11% to gain exposure to nearly 2,600 stocks in 30 different EMs is a bargain. Of the 11 portfolio building blocks in the equity category, SPEM is one of four international equity ETFs, and the only emerging markets fund. The SPDR Portfolio Emerging Markets ETF ( SPEM, $43.31) is one of State Street's 22 ETF "building blocks." These funds are meant to provide investors with a low-cost core: the foundational pieces of a well-constructed portfolio. *SEC yields reflect the interest earned after deducting fund expenses for the most recent 30-day period and are a standard measure for bond and preferred-stock funds. To learn more about EMB, visit the iShares provider site. More than half of the portfolio (56%) carries an investment-grade rating. The weighted average coupon of the 573 bonds held is nearly 5%, while the weighted average maturity is 13.6 years. Morgan USD Emerging Markets Bond ETF offers 3.7% in yield at the moment. That's strong geographic diversification. The top three countries at the moment are Mexico (5.5%), Indonesia (4.9%) and Saudi Arabia (4.5%), but it offers exposure to dozens of other countries, including Argentina, Nigeria and Hungary.
EMB gives investors access to U.S.-dollar denominated debt in more than 30 emerging markets for a paltry 0.39% fee. The ETF tracks the performance of the J.P. Morgan USD Emerging Markets Bond ETF ( EMB, $112.58). And they can do this via the iShares J.P.
investors can't dip their toes into frontier markets bonds via exchange-traded funds, they can tap the next best place – emerging markets bonds.
To learn more about VWO, visit the Vanguard provider site. But additional growth justifies at least a small portion of your assets if you're a risk-averse investor. The currency risks of ETFs for emerging markets are considerably higher than an S&P 500 tracker. Plus, this is a growthy group of stocks, with estimates for annual earnings-per-share (EPS) growth averaging 12.2%.
That means you're getting a wide basket of stocks that lean toward the large side, with a mostly buy-and-hold mentality. The median market cap of a VWO holding is $28.1 billion, and the turnover rate is just 10.1%. China has the largest representation at 40.2% of the fund, followed by Taiwan at 17.6% and India at 12.7%. The ETF is currently made up of more than 5,000 stocks from roughly 25 different countries, including the likes of e-commerce firm Alibaba Group ( BABA), internet titan Tencent Holdings ( TCEHY) and chipmaker Taiwan Semiconductor ( TSM). As indicated in the index name, VWO not only invests in Chinese stocks headquartered in Hong Kong, but also "A Class" shares for companies listed in Shenzhen and Shanghai. The index tracks the performance of the FTSE Emerging Markets All Cap China Class A Inclusion Index, a market-cap-weighted index that invests in the emerging markets across all market caps, including large-, mid- and small-cap stocks. You can't even get a cup of coffee for a buck these days. And that's the case with VWO, which charges just 0.10% in management fees, or $1 per every $1,000 invested in the fund. One of the best things about owning Vanguard funds is that its scale allows it to provide some of the lowest costs among providers. When it comes to emerging market ETFs, the Vanguard FTSE Emerging Markets ETF ( VWO, $51.65) is the largest U.S.-listed one with a massive $84.1 billion in total assets. Expenses: 0.10%, or $10 annually for every $10,000 invested.
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