Tracking the Best ETFs in May

Doug Fabian
Posted: Jun 07, 2014 12:01 AM
Tracking the Best ETFs in May

Tracking the Best ETFs in May

By Doug Fabian

Editor, Successful ETF Investing

Sell in May and go away? Well, that wasn’t very good advice this year, especially if you were allocated to emerging markets and, in particular, India and Russia.

The table below shows the top-performing exchange-traded funds (ETFs) during May (excluding leveraged funds). As you can see, the list is dominated by India, with returns of more than 22% in the top three India-centric funds.




Assets (in $millions)


India Small Cap ETF




India Small-Cap Index ETF




India Infrastructure ETF




MSCI India Small Cap Index Fund




Market Vectors Russia Small-Cap ETF




iShares MSCI Russia Capped ETF








Market Vectors Russia ETF




India Earnings Fund




India Consumer ETF



The gains were so good in the small-cap segment of the Indian market that we were able to close out a profit of nearly 27% in the India Small-Cap Index ETF (SCIF) in the Successful ETF Investingnewsletter advisory service. Moreover, we captured that gain in just three weeks to serve as a testament to very good timing, as well as the power of country-specific ETFs in hot sectors.

One thing that makes a sector hot, especially when it comes to country-specific funds, is some type of major political change or policy reforms. In the case of India, the gains really started when it became clear that the Indian people were about to elect the pro-business Bharatiya Janata Party, or BJP, and particularly the BJP Party leader Narendra Modi to the post of prime minister. The market loved this development, and hence the big gains in our SCIF position.

The second market on this list making bullish waves in May is Russia. Now, with all of the bellicose political headlines over the past several months between Russia, the Ukraine and Crimea, you might think that Russia is a market to avoid at all costs. Well, this view would be both short-sighted and wrong.

The chart here of the Market Vectors Russia ETF (RSX) shows the big move higher in the Russian equity market since mid-March. Interestingly, though RSX is trading above its 50-day moving average, it has not yet broken resistance at the 200-day moving average of $26.01.

If the buying continues in RSX, it could be the catalyst for a very bullish move above the 200-day average — and that could foist this fund into even bigger gains in the latter half of 2014.

In case you missed it, I encourage you to read my e-letter column posted last week onEagle Daily Investorabout how the Chinese market has risen quietly.

ETF Talk: Emerging Markets Show Potential

Most emerging-market exchange-traded funds (ETFs) are broad-based investments in a universe defined largely by geography. This investment approach is fueled by economies that are driven increasingly by wealthy and better-educated populations in emerging markets. With emerging markets typically growing faster than developed ones, investors who lack the time to investigate and understand the unique properties of each such market can invest in broad, diversified emerging-market funds.

Emerging Global Advisorsis an ETF provider that tries to research and find the best emerging markets to include in its funds. The company’s 17 ETF offerings, calledEGShares, are aimed at letting investors use investment strategies for emerging markets that focus on core positions and developing market themes that are expected to offer the most potential. The provider uses indices that contain only developing market growth themes to exploit market trends, while excluding any holdings that the International Monetary Fund categorizes as developed. Emerging Global Advisors ETFs let you approach emerging markets with a less country-specific focus, in case you like diversification when investing in higher-risk and higher-reward opportunities.

Emerging Markets Dividend Growth (EMDG)is one of the provider’s funds. EMDG invests in 50 emerging-market companies with a high compounded annual dividend growth rate. It currently is most heavily invested in Brazil, Russia, Indonesia and China. The fund has gained 3.9% so far this year and it has issued three quarterly dividends since its inception in July 2013. Thus, it offers investors a bit of income, too.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to mySuccessful ETF Investingnewsletter.