ETF Talk

ETF Talk: Eyeing GEMS for Your Portfolio

When I look for an investment opportunity, I am particularly interested in recovering markets. That’s why I was intrigued when Fed Chairman Ben Bernanke’s announcement on quantitative easing spurred a sell-off in global and emerging markets earlier this month.

As a result, I have found an exchange-traded fund (ETF) that taps into a diverse group of emerging markets, the EGShares Technology GEMS ETF (QGEM). This fund invests nearly 90% of its resources in emerging markets in Asia, Africa and South America. Chinese holdings lead the way at 49.15%, followed by Indian holdings at 29.01%. QGEM also invests 3.48% in Thailand, 2.88% in Chile, 2.64% in Indonesia, 2.28% in South Africa and 1.50% in Turkey.

The emerging market index, which includes stocks from all of these countries, looks ripe for a recovery due to its abnormally low P/E ratio. QGEM, on the other hand, already is nicely situated at a 16-to-1 P/E ratio, but this ETF has holdings in key countries that will benefit from such a rebound. QGEM should be well ahead of the emerging market surge.

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