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Emerging Market ETF (EWX) Hits New 52-Week High

Sweta Killa

For investors seeking momentum, SPDR S&P Emerging Markets Small Cap ETF EWX is probably on radar now. The fund just hit a 52-week high and is up nearly 26.4% from its 52-week low price of $36.97/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

EWX in Focus

This fund seeks to provide exposure to the small cap segment of emerging countries included in the S&P Global Broad Market Index. It has key holdings in information technology, consumer discretionary, industrials, financials and materials. Taiwan dominates the portfolio with more than one-fourth share while China and India round off the next two with a double-digit exposure each. It charges 65 bps in fees per year and has AUM of $446.8 million (see: all the Broad Emerging Market ETFs here).

Why the Move?

The emerging market has been an area to watch lately given the stellar ride in stocks that are not showing any signs of slowing down. The rally was driven by improving economic growth in many parts of the developing world, a pickup in manufacturing activity, a rebound in commodity prices, better current accounts, better-than-expected earnings, sector-specific reforms and growth policies. Additionally, the cautious stance of the Fed for future rate hikes continues to instill confidence in emerging markets. A weaker greenback and threats of political uncertainty in the U.S. have added to the strength.  

More Gains Ahead?

Currently, EWX has a Zacks ETF Rank of 3 or ‘Hold’ rating with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. Further, this fund might remain strong given a high weighted alpha of 21.90% and a low 20-day volatility of 11.49%. As a result, there is still some promise for investors who want to ride on this surging ETF.

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