PowerShares S&P Emerging Markets Low Volatility Portfolio (EELV)
As tempting as it is to pick one of Charles Sizemore’s top five emerging market ETFs for 2014, I’m going to want a broader take on emerging markets considering that VEU has just 18% invested in those markets. That’s why I’ve chosen the PowerShares S&P Emerging Markets Low Volatility Portfolio (EELV), which tracks the 200 least-volatile stocks of the S&P Emerging BMI (broad-market index) plus LargeMid Cap Index over the last 12 months.
Unlike many of the broad-based emerging market ETFs, China isn’t the top-weighted country. In fact, it’s all the way down in fifth with a weighting of 8.91%. Ahead of China are South Africa, South Korea, Malaysia and Taiwan at No. 1. Also attractive is the fact Colombia, Mexico, Chile and Brazil are represented in the top 10 holdings. I have a soft spot for Latin America and companies doing business in the region.
Some might not like this recommendation when combined with RWW because EELV is 33% invested in financials. However, the RWW is invested in financial stocks that generate a significant amount of business in the U.S. and other developed countries while the financial holdings in EELV generate most of their revenues from emerging markets. While there’s some overlap, it’s not enough for me to back away from this recommendation. I see a good year for EELV in 2014.