With the recovery efforts in Japan underway and protest movements petering out in the Middle East (with Libya being the big exception), global equities markets have had a chance to recover. Adding to this general trend is a number of increasingly positive job reports from the US, which could point to a sustained and robust recovery in the world’s largest economy. The worldwide recovery along with lessening geopolitical volatility has had an interesting effect on global ETFs, especially among BRIC funds.
Predictably, the nuclear disaster in Japan caused the ELEMENTS Credit Suisse Global Warming Index Exchange-Traded Note (GWO) to surge. The note, which tracks 40 stocks in the clean-tech industry and is rebalanced semi-annually, is up 30.3% in the past month and is currently trading at $11.40 per share. Last week alone, the ETN gained 26.5% on the same week that the environmentalist Green Party made surprising gains in regional German elections.
Among Market Vector’s BRIC country ETFs, commodity exporters were the clear winners. The Market Vector Russia ETF Trust (AMEX:RSX) has gained 12.19% in 2011. The fund is heavily weighted towards the Russian energy and mining industry, which has propelled the fund upward on the back of dramatically higher commodity costs. The Market Vectors Brazil Small Cap ETF (AMEX:BRF) has also had an impressive run, racking up 8.83% gains in the past month. The Brazil fund is more weighted towards the Brazilian retail sector and benefits from increased Brazilian consumer spending on the back of a stronger currency and pricier Brazilian commodity exports.
Market Vector’s Chinese and Indian ETFs have largely lost ground. Market Vectors China A shares ETF (AMEX:PEK) has slumped 1.77% in the past three months. The fund’s largest holding is in Chinese financial institutions, which have suffered from the PRC’s relentless war on inflation via tighter monetary policy and higher capital requirements. Finally, the Market Vector India Small Cap Index ETF (AMEX:SCIF) is down 13.59% in 2011 owing to the fund’s concentration in industrials and banking stock.
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