Greetings!
Happy New Year! Below please find the ETF Spotlight newsletter containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market.
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In this week's issue
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- Chart of the week: Emerging Markets Most Attractive Since GFC
- Fund Focus: iShares MSCI Emerging Markets (EEM)... page 2
- Revisions, assets flows & short interest...page 3
- 2012 Dividends per share estimates, annual change, and yield of major ETFs...page 4
- Market monitor: big movers & market segments...page 5
Download ETF Spotlight here. |
Chart of the week
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Emerging Markets Most Attractive Since GFC
It's typical for the iShares MSCI Emerging Markets fund (EEM) to have a higher ALTAR Score rating than the S&P500 SPDR (SPY)--as it theoretically should--to compensate investors for the extra risk. However, the difference between the two can vary considerably, and helps inform investors about the relative attractiveness of either fund.
When the ratio of ALTAR Scores EEM/SPY is higher than average it indicates emerging markets are more attractive than usual, and vice versa. Last year, EEM fell 18.8% while stocks in SPY returned 1.9%, a difference of 20.7%-age points, even as both EPS and book value of stocks in EEM continued to increase (as they are forecast to do again in 2012). As a result, EEM is trading at elevated levels of attractiveness not seen since the Global Financial Crisis in 2008-09.
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Figure: Relative ALTAR Score EEM/SPY
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Fund in Focus
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 iShares MSCI Emerging Markets (EEM)
There's no doubt that growth rates for sales and earnings are slowing for firms in EEM (as are the economies of some emerging markets) and profitability isn't what it was in the boom days of 2006-07. However, 2011 was a lousy year for emerging market stocks, and as a result EEM is the most attractive it has been relative to the S&P500 since the Global Financial Crisis.
Download ETF Spotlight here.
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