Tag: SPEM

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FEMS vs DGS vs EWX vs EEMS vs SPEM – 5 Best Diversified Emerging Markets ETFs to Own Long-Term 1.6

  • Asset Class: Diversified Emerging Markets

  • Correlation to U.S. Stock Market: 0.75

  • Long-Term Performance: 5.35% CAGR

  • S&P 500 Performance: 9.91% CAGR

  • Oldest ETF back tested: iShares MSCI Emerging Markets ETF (EEM)

  • Correlation to U.S. Stock Market: 0.76

  • Long-Term Performance: 8.11% CAGR

  • S&P 500 Performance: 9.73% CAGR

  • Back test timeframe: May 2003 – February 2023

  • Number of ETFs available in this asset class: 95

  • Number of ETFs in this asset class that are 10-years old or older: 26

Diversified Emerging Markets vs S&P 500: January 1995 – February 2023

EEM vs SPY: May 2003 – February 2023

EEM vs SPY: April 11, 2003 – March 3, 2023

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4 Best Diversified Emerging Markets ETFs to Own Long-Term 1.5

  • Asset Class: Diversified Emerging Markets

  • Oldest ETF back tested: iShares MSCI Emerging Markets ETF (EEM)

  • Correlation to U.S. Stock Market: 0.76

  • Long-Term Performance: 9.58% CAGR

  • S&P 500 Performance: 10.75% CAGR

  • Back test timeframe: May 2003 – February 2022

  • Number of ETFs available in this asset class: 81

  • Number of ETFs in this asset class that are 10-years old or older: 23

EEM vs SPY: May 2003 – February 2022

EEM vs SPY: April 11, 2003 – March 2, 2022

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SPEM: Cheap China-Heavy EM Fund For The Long Haul

Summary

  • SPEM offers exposure to a diversified basket of EM securities in exchange for just 11 bps, with a dividend yield close to 2%.
  • The Chinese equities have around 35.5% weight in the portfolio, while Hong Kong-listed stocks account for 2.2%. Indian stocks are in second place with a 16% share of the AUM.
  • Large exposure to China has dented its YTD returns.
  • The ETF Grades illustrate that with its small fees and low turnover (factored in the Risk grade), SPEM definitely has an edge over its peers.
  • Investors seeking cheap low-turnover EM strategy for the long haul should pay attention to SPEM.

Continue reading at Seeking Alpha right here: https://seekingalpha.com/article/4460187-spem-cheap-china-heavy-em-fund-for-long-haul?utm_source=stck.pro&utm_medium=referral

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4 Best Long-Term Performance Diversified Emerging Markets ETFs 1.4

  • Asset Class: Diversified Emerging Markets

  • Most Popular ETF back tested: iShares MSCI Emerging Markets ETF (EEM)

  • Correlation to U.S. Stock Market: 0.79

  • Long-Term Performance: 10.89% CAGR

  • S&P 500 Performance: 10.32% CAGR

  • Back test timeframe: May 2003  – January 2021

  • Number of ETFs available in this asset class: 78

  • Number of ETFs in this asset class that are 10-years old or older: 14

EEM vs SPY: May 2003 – January 2021

EEM vs SPY: April 11, 2003 – February 5, 2021

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4 Best Long-Term Performance Diversified Emerging Markets ETFs 1.3

  • Asset Class: Diversified Emerging Markets

  • Most Popular ETF back tested: iShares MSCI Emerging Markets ETF (EEM)

  • Long-Term Performance: 8.46% CAGR

  • S&P 500 Performance: 8.43% CAGR

  • Back test timeframe: May 2003  – March 2020

  • Number of ETFs available in this asset class: 77

  • Number of ETFs in this asset class that are 10-years old or older: 12

EEM vs SPY: May 2003 – March 2020

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Best Long-Term Performance Diversified Emerging Markets ETFs 1.2

  • The largest and one of the oldest Diversified Emerging Markets ETFs has outperformed an S&P 500 index fund by 0.95% CAGR over the last 16 years
  • One older Emerging Markets index mutual fund has outperformed an S&P 500 index fund by 2.57% CAGR over the last 20 years
  • The Emerging Markets asset class has been the #1 or #2 best performing equity asset class in 7 of the last 15 years
  • Emerging Market equities are generally riskier and more volatile.
  • Diversified Emerging Markets ETFs can help investor diversify into these markets with less risk
  • There are 79 ETFs available in the Morningstar category “Diversified Emerging Markets”. 12 of these funds have been available for 10 years or longer

The iShares MSCI Emerging Markets ETF (EEM) is the largest and one of the oldest available ETFs in the Emerging Markets asset class. It was launched on April 7, 2003. Since that time, EEM has had a compounded rate of return of 10.39%. An S&P 500 index fund returned 9.44% CAGR over the same period. This outperformance came with a price though, and that price is called volatility. In the case of EEM, it’s standard deviation (a measure of volatility) was 21.97% while the S&P 500 was only 13.38% (lower mean less volatility). Other ways to demonstrate how this volatility (risk) relates to performance (reward) are the Sharpe and Sortino ratios. Typically, the higher these ratios, the better the risk vs reward ratio. In the chart below, the S&P 500 funds’ Sharpe & Sortino ratios are both higher than EEM. So, with all this additional risk, why should long-term investors consider allocating part of their equity portfolio to Diversified Emerging Markets? My answer is diversification. Diversification has oft been quoted as the “only free lunch in investing”. As a long-term investor and an investment blogger, I have made it my mission to find and invest in as many different equity asset classes as possible without degrading long-term performance. Diversified Emerging Market funds can be  a useful component in a worldwide equity portfolio because they have the potential to lift long-term performance while simultaneously reducing overall risk. The risk reduction can be found in this asset class’ correlation to U.S. Markets. Once again, referring to the chart below, this asset class has a correlation to U.S. Markets of 0.79. This is a favorable number, because the lower the number, the lower the correlation to U.S. Markets, so long as the asset class does not perform poorly long-term.

EEM vs S&P 500 index fund: May 2003 – March 2019

Source: https://www.portfoliovisualizer.com/

EEM vs SPY: April 11, 2003 – April 21, 2019

Source: https://www.koyfin.com/home

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Best Long-Term Performance Emerging Markets ETFs 1.1

Have you considered investing some of your portfolio into Emerging Markets? If so, this article is meant to assist investors in finding the best long-term performance ETFs in the Morningstar category called “Diversified Emerging Markets”. While Emerging Markets have had a long history of great returns, there has also been a long dry spell in the last decade in this asset class. Many value investors have already assessed that reversion to the mean will occur in the future for this asset class, but do not know when. Those who choose to invest in Emerging Markets will no doubt have to endure some pain and significant volatility while holding funds dedicated to this market. Short term, we have little evidence in ETFs that Emerging Markets are lucrative investments. But, long-term, there is considerable evidence that Emerging Markets can be great long-term holdings in a worldwide equity portfolio.

ADRE vs S&P 500: December 2002 – June 2018

Source: https://www.portfoliovisualizer.com/backtest-portfolio

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