We have been following the recent volatility in emerging
markets attempting to discern if the two month rally is ending and the answer
seems to lie within the confines of the Federal Reserve. Last week’s taper fears have subsided with
weak home sales and disagreement among central bank governors. So as the Carpenters sang, it looks like we’ve
only just begun.
It has been all white lace and promises for the SPDR
S&P China Fund (GXC)
getting all 10 Green Diamonds for the 18th time since July 12th
and 15 of the last 17 days. It has
gained about 8% in those 6 weeks that the US market has lost about 1%. Performance like that certainly earns its 1st
place rank and the iShares FTSE/Xinhua China 25 Index Fund (FXI) has earned its 3rd
place rank by performing as well despite scares last week. Scores are similar to when we highlighted both
funds last Wednesday with the exception of better Behavioral Scores today
resulting from higher volatility readings.
That volatility knocked a couple of broader emerging markets funds out
of the top 10 but the Powershares BLDRS Emerging Markets 50 ADR Index Fund (ADRE) has come back to 4th
place today and their S&P Emerging Markets Low Volatility Portfolio (EELV) has come back to 6th. EELV was also covered Wednesday with almost
the same scores except for its higher Behavioral Score today on the same uptick
in volatility. We mentioned ADRE a few
times in July and early August but haven’t highlighted its more balanced scores
with 67.9 on the Behavioral side along with its better 78.4 Fundamental
Score. Short interest, implied
volatility and short and intermediate term technicals all drive the Behavioral
side while the Fundamentals are driven by 98 in both cash flow and book value
scores. 3 of the 4 ETFs have Red Diamond
Risk Ratings above 5 with EELV coming in below average at 3.49, as its name
would suggest.
With so many
roads to choose from, Quant helps us share horizons that are new to us and we
will watch the signs along the way here at ETFGsm Daily Perspectives. Those
signs say the emerging markets still have room to grow and yes, we’ve just
begun. Even before the Carpenters began
to sing, a pioneering woman was elected to membership in the NYSE, more than 45 years later
we wish Muriel Seibert peaceful eternal rest.
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