4 International Rodney Dangerfield ETFs (CROP, ECH, ELD)
The late, great comedian Rodney Dangerfield used to complain about a lack of respect. There are plenty of ETFs on the market today that face the same plight. With a constituency that is rapidly approaching 1,500 combined ETFs and ETNs, the exchange-traded products industry is bound to have a few products that get no respect.
With the proliferation of ETFs and ETNs has come the proliferation of superficial evaluation tools that shift investors' attention away from performance and onto cosmetic traits. The result? Plenty of Rodney Dangerfield ETFs exist today, particularly among funds tracking global markets or sector plays with international exposure.
Just as membership at Bushwood Country Club is no laughing matter, neither is the fact that some global funds can't seem to muster up much respect despite the promise they've shown in recent months. Here are a few to consider buying on a potential broader market dip.
iShares MSCI Chile Investable Index Fund (NYSE: ECH) The iShares MSCI Chile Investable Index Fund is neither small, nor ignored. Home to almost $709 million in assets under management the ETF is the lone fund devoted tracking the world's largest copper-producing nation. That might be why ECH has struggled for respect in recent weeks. Investors have become skittish about China's demand for the red metal and that's arguably the primary reason why ECH has lost almost 3% in the past month.
ECH has held up well compared to comparable Brazil funds and Chile's central bank said the country's economy expanded at a 5.2% clip in March. Not only did that beat expectations, Chile showed an April trade surplus of $1.05 billion compared to the surplus of $650 million economists polled by Bloomberg expected.
WisdomTree Emerging Markets Local Debt ETF (NYSE: ELD) It has been noted many times since birth of actively managed ETFs that this sub-sector of the ETF world has struggled to gain traction with investors. As of mid-April, actively managed ETFs had just $5.8 billion in AUM, according to S&P Capital IQ data, but the WisdomTree Emerging Markets Local Debt ETF is one of the dominant actively managed funds with almost $1.3 billion in AUM.
It has been said that the PIMCO Total Return ETF (NYSE: BOND) is a game-changer among actively managed ETFs. Given that BOND is basically the "Bill Gross ETF," it's hard to argue, but a legitimate case can be made for ELD being the original game-changer for actively managed ETFs. Up almost 8% year-to-date, ELD tracks bonds issued by Brazil, Chile, Colombia, Mexico, Peru, Poland, Turkey, South Africa, Russia, Malaysia, Indonesia, Philippines, Thailand, China, and South Korea.
iShares S&P Global Energy Sector Index Fund (NYSE: IXC) Like the Energy Select Sector SPDR (NYSE: XLE), IXC does feature heavy allocations to Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX), but the iShares offering also does an admirable job of mixing solid exposure to the European oil majors such as Royal Dutch Shell (NYSE: RDS-A) and BP (NYSE: BP).
IXC and XLE share a fairly intimate correlation and it should be noted that IXC's chart is weak after the ETF violated support at $38. Patient buyers can wait for better prices over the coming weeks.
IndexIQ Global Agribusiness Small Cap ETF (NYSE: CROP) CROP, which is almost 14 months old, has a tendency to fly under the radar because many traders and investors still think the only ETF avenue for agribusiness stocks is the Market Vectors Agribusiness ETF (NYSE: MOO).
There several important things about CROP and MOO to note. First, nearly every fund that has challenged MOO has failed. Second, CROP is not a rival, but rather a complement to MOO. Third, there has been little difference in the returns offered by the two funds this year. Finally, CROP is arguably the better play should agribusiness mergers and acquisitions activity increase later this year.
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