Under The Hood: EGShares Emerging Markets Consumer ETF

One of the pivotal sub-plots in the emerging markets bull run of 2010 has been the strength of the consumer in various emerging markets. Plenty of analysts, experts and pundits have opined about emerging middle classes in countries such as Brazil, China and India and the potential the new found wealth in these markets (and others ) holds for investors. To be sure, the story of the middle class in emerging markets is still in its nascent stages, but there are a few ETFs with which to play this trend, making now a good time to go under the hood with the EGShares Emerging Markets Consumer ETF ECON. It may be a surprise to some, but ECON's top country weight is Mexico at 18.71%, followed by Brazil at 15.47% and South Africa at almost 14%. Surprisingly, China is the fifth-largest country weight at almost 9%. The sector breakdown is actually quite good with ECON, but investors would do well to note that automobile makers and parts suppliers account for almost 14% of the fund's sector weight. Five other secors get weights of at least 10%. They are as follows: Beverages, food producers, travel, media and food and drug issues. General retailers barely miss the 10% mark. ECON has put in admirable run of just under 15% since its mid-September debut, but the ETF is currently fighting resistance at $23. Good news: ECON can be used by conservative investors as the ETF focuses on large-cap issues with an average market value of $15.1 billion. Bad news: The expense ratio of 0.85% is quite high.