Best & Worst Broader Emerging Market ETFs of Q1

Sanghamitra Saha

Global stock markets suffered historic losses in the first quarter of 2020 due to widespread coronavirus-induced selloffs. Markets saw a massive wipe out of $12 trillion. Oil slumped 60% due to a row between Saudi Arabia and Russia regarding the prolongation of the output cut as well as lacklustre demand. No wonder, emerging markets (EM) economies were dealt a heavy blow as well, especially with China being the epicenter of the disease.

The quarter saw strength in the greenback. Invesco DB US Dollar Index Bullish ETF UUP gained about 4%, wreaking havoc on emerging market currencies. Brazil, Mexico and South Africa have seen their currencies plummet more than 20%, per Reuters. iShares MSCI Emerging Markets ETF EEM lost 26.7% in the first quarter and WisdomTree Emerging Currency Strategy ETF CEW retreated about 12.7% (read: U.S. Dollar Climbs: ETFs to Gain/Lose).

In comparison, China stocks put up a fierce fight, having lost only 11% in dollar terms. But other major emerging economies suffered a great deal. iShares MSCI Brazil Capped ETF EWZ and iShares India 50 ETF INDY have lost 38% and 52% so far this year. Commodity price crash and rising bad-debt levels have prompted preventive stimulus measures across many countries (read: What Coronavirus? These China ETFs Gained Past Month).

Against this backdrop, we highlight a few broader emerging market ETFs that emerged as the best and worst performers of the first quarter.

Toppers

ProShares Short Term USD Emerging Markets Bond ETF EMSH — Down 8.5%

The underlying DBIQ Short Duration Emerging Market Bond Index is composed of a diversified portfolio of USD-denominated emerging markets bonds that have less than five years remaining to maturity. The bonds are issued by emerging markets sovereign governments, non-sovereign government agencies and entities, and corporations with significant government ownership. It yields 3.58% annually.

SPDR DoubleLine Emerging Markets Fixed Income ETF EMTL — Down 10.9%

This ETF is active and does not track a benchmark. Chile, Mexico, Panama, Colombia and Indonesia take about 60% of the fund. It yields 4.04% annually. 

EMQQ The Emerging Markets Internet & Ecommerce ETF EMQQ — Down 11.4%

The underlying EMQQ The Emerging Markets Internet & Ecommerce Index is designed to measure the performance of an investable universe of publicly-traded, emerging market internet and ecommerce companies. Tencent (9.08%), Alibaba (8.1%) and Naspers (7.3%) are the top three holdings of the fund.

Losers

Global X MSCI SuperDividend Emerging Markets ETF SDEM — Down 34.9%

The underlying MSCI Emerging Markets Top 50 Dividend Index tracks the performance of 50 equally-weighted companies that rank among the highest dividend yielding equity securities in Emerging Markets. It yields 10.02% annually.

Cambria Emerging Shareholder Yield ETF EYLD — Down 32.1%

The underlying Cambria Emerging Shareholder Yield Index includes stocks in emerging market countries with high cash distribution characteristics. It yields 6.04% annually.

ALPS Emerging Sector Dividend Dogs ETF EDOG — Down 31.8%

The underlying S-Network Emerging Sector Dividend Dogs Index selects five stocks in each of the ten GICS sectors that make up the S-Network Emerging Markets which offer the highest dividend yields as of the last trading day in November.

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iShares MSCI Brazil ETF (EWZ): ETF Research Reports
 
iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports
 
Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports
 
iShares India 50 ETF (INDY): ETF Research Reports
 
WisdomTree Emerging Currency Strategy ETF (CEW): ETF Research Reports
 
Cambria Emerging Shareholder Yield ETF (EYLD): ETF Research Reports
 
Global X MSCI SuperDividend Emerging Markets ETF (SDEM): ETF Research Reports
 
EMQQ The Emerging Markets Internet & Ecommerce ETF (EMQQ): ETF Research Reports
 
ProShares Short Term USD Emerging Markets Bond ETF (EMSH): ETF Research Reports
 
SPDR DoubleLine Emerging Markets Fixed Income ETF (EMTL): ETF Research Reports
 
ALPS Emerging Sector Dividend Dogs ETF (EDOG): ETF Research Reports
 
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