Emerging Market ETF Ideas

Written by GSCR Staff   
Tuesday, 21 May 2013 07:59

Many ETF buyers use the vehicles to invest in or leverage against specific sectors. ETFs can also represent emerging market nations, which, while carrying greater risk than U.S. equities, can also offer big rewards.  

For example, a common acronym used in a financial and geo-political aspect is BRIC.  BRIC is the acronym for Brazil, Russia, India, and China, representing some of the largest economies in the world.  While lumping all of these countries all together as one common entity is a vast overreach for simplicity, investing in ETFs that are representative of these regions can be a fruitful way of gaining broad exposure in one fell swoop.

There are a bevy of choices out there in the ETF universe.  Below are a few possibilities in emerging markets with our small cap mentality in mind, i.e. maximum current prices close to the $20 target or lower.  We note that these suggested vehicles address a longer term perspective for the most part, of at least a year, and not necessarily a trading idea for a quick profit.

Brazil (BRXX –$20.63 – EGShares Brazil Infrastructure):

This one has been downtrodden a little since the start of the year, so it may be time to buy ‘cheap’.  With two huge international events coming up, the FIFA World Cup in 2014, and 2016 Summer Olympic Games, the country is pouring money into infrastructure. 

Russia (RSXJ - $14.18 – Market Vectors Russia Small Cap):

Russia is by far the worst performing BRIC or BRIC plus one nation.  RSXJ has endured a serious sell-off recently as Russia is entering a recession coupled with inflation.  The ETF price is right, but this maybe a long shot and more of a long term play.

India (SCIN –$13.53 - EGShares India Small Cap):

This ETF looks very good from a technical perspective for short, intermediate, and long term.  India themed funds took a small hit earlier this year, but are starting to rebound.

China (VNM - $20.77 – Market Vectors Vietnam):

OK, so we cheated a little here.  Consider this a high risk, high reward ETF as the Vietnamese stock market is relatively volatile.  However, the opportunity for growth is phenomenal and the government continues to ‘imitate’ China from with its embrace of capitalism but is about 20 behind.

 

Disclosure: Goldman Small Cap Research analysts are neither long nor short these shares but may elect to purchase the stock within the next 48 hours.

Disclaimer:

This Market Monitor blog was prepared for informational purposes only. Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research, which typically highlights small cap companies, and Goldman Opportunity Research, which features micro cap companies in a sponsored research format. Thus, the Select product reflects the Firm’s internally generated stock ideas while the Opportunity product reflects sponsored research reports. 

It is important to note that while we may track performance separately, we utilize the same coverage criteria in determining coverage of all stocks in both research formats. Please view the company’s individual disclosures for each engagement, which can be found in each company-specific report. All information contained in this blog, newsletter and in our reports were provided by the Companies or generated from our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations. 

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research blog, report, note, or newsletter is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This blog does not take into account the investment objectives, financial situation, or particular needs of any particular person. This blog does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA or with any state securities regulatory authority.

ALL INFORMATION IN THIS BLOG, REPORT OR NEWSLETTER IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS   INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com

Add comment
  • No comments found