Emerging Market ETFs: Biggest Winners & Losers YTD

by on June 10, 2013 | ETFs Mentioned:

Emerging markets have captivated investors for almost a decade when developed markets became a yield-barren investment. After years of pushing the limits of GDP growth and infrastructure spending, some emerging countries are finally losing steam. With the added stabilization in the European Union and U.S., investors have been abandoning their emerging holds in favor of past domestic strategies. But investors seeking a strong emerging strategy are not out of luck; a number of emerging economies have continued to push the limit for returns in 2013 [For updates on all new ETFs, sign up for the free ETFdb newsletter].

Below, we highlight a handful of emerging market ETFs that have surpassed all others since the beginning of 2013 (note that inverse and leveraged ETFs are excluded from this list):

  1. Jakarta, the capital and largest city of IndonesiaMarket Vectors Indonesia Small-Cap ET (IDXJ, C), Up 39.7%: By tracking the performance of the Indonesian small-cap market segment, this fund has taken off in the last six months. After only 15 months since inception, IDXJ has brought in $6.78 million and enjoyed exposure to a strong growth cycle in the Indonesian economy [see 3 Things You Need To Know When Picking A Country ETF].
  2. Market Vectors Gulf States (MES, B), Up 22.5%: This ETF is designed to provide exposure to publicly traded companies that are headquartered in countries belonging to the Gulf Cooperation Council; Kuwait, United Arab Emirates, Qatar, Oman, and Bahrain. While many investors shy away from the Middle East, funds like MES and the Middle East Dividend ETF  (GULF, B) have brought in exceptional returns this year.
  3. Market Vectors Vietnam ETF (VNM, C+), Up 17.3%: This mostly balanced portfolio offers exposure to companies primarily listed in Vietnam and which generate at least 50% of their revenues in the country. This selection of funds ensure that investors gain true exposure to the ever expanding Vietnamese market [see Emerging & Frontier Markets ETFdb Portfolio].

Below are three emerging market ETFs that missed out the most over the past six months:

  1. Overcrowded Train In IndiaIndia Small-Cap ETF (SCIF, C), Down 23.3%: Once one of the strongest emerging markets and a staple for international portfolios, India has not been able to keep up with investor expectations in the last year. Small-cap funds like SCIF and India Small Cap ETF (SCIN, C) have seen a huge drop in investors and returns after India’s small-cap market was among the worst hit by the economic slowdown [see Where Does Your Emerging Markets Bond ETF Really Invest].
  2. iShares MSCI South Africa Index Fund (EZA, B-), Down 17.7%: This South African fund has always put investors on edge, featuring strong returns one year just to lose it all the next. After gaining 21% in 2012, this equity fund is down nearly that much in just the last six months.
  3. Market Vectors Egypt Index ETF (EGPT, C), Down 15.5%: Outperforming all expectations last year, this North African fund was one of the highest returning emerging funds only six months ago. With instability seeping in once again, Egypt’s economy has not left many international investors confident with the country’s future returns [see Free Report: How To Pick The Right ETF Every Time].

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Disclosure: No positions at time of writing.