Emerging Market Small Cap: An investment with High Risk But Rapid Returns
05/05/2011 0 comments
Emerging markets operate new environments, with new challenges and unique models for investment. Despite the risk and the toughness, emerging markets have an interesting potential to grow rapidly. Small Cap emerging market funds are going to be the some of the fastest growing but potentially most volatile of the emerging market alternatives.
Emerging Market Small Cap
04/29/2011
|
Description |
Symbol |
1 Yr |
3 Yr |
5 Yr |
Avg. Volume(K) |
1 Yr Sharpe |
|
Wisdomtree Emerging Mkts Small |
27.65% |
11.91% |
NA |
179 |
121.55% |
|
|
Guggenheim Frontier Markets |
15.44% |
NA |
NA |
139 |
77.14% |
|
|
SPDR S&P Emerging Markets Small |
11.76% |
NA |
NA |
141 |
57.65% |
Wisdomtree Emerging Mkts Small (DGS) has this time a strong returns, investing the major part of the fund in the Industrial, Financial, and Consumer Discretionary Sector (22%, 28% and 17.5%, respectively). This fund invest mostly in Taiwan, Korea, South Africa and Thailand.
Following, the Guggenheim Frontier Markets ETF (FRN), which 80% of the assets of the fund is invested in American depositary receipts ("ADRs") and global depositary receipts ("GDRs"). The investments are made in what is called “Frontier Markets”, with the participation of developing markets such as Chile, Colombia and Egypt.
Finally, SPDR S&P Emerging Markets Small Cap (EWX) has the lowest figures among the three showed. This fund invest in Emerging Markets included in the S&P Global BMI Index, tracking all the stocks in developed and emerging markets with float-adjusted market capitalization of at least $100 million.
Major Asset Classes Trend
04/29/2011
|
Description |
Symbol |
1 Week |
4 Weeks |
13 Weeks |
26 Weeks |
52 Weeks |
Trend Score |
|
Gold |
3.84% |
9.46% |
16.96% |
14.89% |
32.08% |
15.45% |
|
|
Commodities |
0.6% |
3.84% |
13.56% |
26.69% |
30.52% |
15.04% |
|
|
US Equity REITs |
3.07% |
5.58% |
10.39% |
15.42% |
22.62% |
11.42% |
|
|
International REITs |
2.78% |
5.26% |
8.35% |
10.35% |
28.26% |
11.0% |
|
|
US Stocks |
2.01% |
2.4% |
7.85% |
18.72% |
19.58% |
10.11% |
|
|
Emerging Market Stks |
-0.22% |
1.71% |
9.98% |
12.03% |
24.84% |
9.67% |
|
|
International Developed Stks |
2.24% |
4.63% |
7.69% |
12.36% |
17.73% |
8.93% |
|
|
International Treasury Bonds |
2.13% |
4.92% |
7.23% |
4.15% |
15.65% |
6.82% |
|
|
US High Yield Bonds |
0.47% |
1.72% |
3.59% |
7.88% |
14.77% |
5.68% |
|
|
Frontier Market Stks |
1.76% |
3.07% |
4.61% |
-2.58% |
16.42% |
4.66% |
|
|
US Credit Bonds |
0.82% |
1.63% |
2.31% |
0.68% |
6.89% |
2.47% |
|
|
Emerging Mkt Bonds |
0.75% |
1.2% |
3.07% |
-2.83% |
8.87% |
2.21% |
|
|
Mortgage Back Bonds |
0.71% |
1.15% |
1.49% |
0.91% |
4.89% |
1.83% |
|
|
Total US Bonds |
0.65% |
1.34% |
1.47% |
-0.02% |
5.4% |
1.77% |
|
|
Intermediate Treasuries |
1.08% |
1.62% |
1.07% |
-2.91% |
7.4% |
1.65% |
|
|
Municipal Bonds |
0.98% |
2.22% |
3.32% |
-1.75% |
1.43% |
1.24% |
|
|
Treasury Bills |
-0.01% |
0.03% |
0.08% |
0.1% |
0.17% |
0.07% |
Analyzing the major assets class trend, it can be seen that the stocks in the Emerging Markets (VWO)have an interesting trend score, taking a strong position in the middle top table, with figures closer to the US Stocks (VTI).
Emerging Markets Small Capitalization represent a good investment for those who do not have problems on risking some money in the short term, and are willing to produce high yields taking into account a smaller period of time.
Symbols: DGS, FRN, EWX, VTI, VWO
Exchange Tickers: (NYSE: DGS), (NYSE: FRN), (NYSE: EWX), (NYSE: VTI), (NYSE: VWO)
Disclaimer: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
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