The next exchange traded fund to be analyzed on Roger’s behalf is the Vanguard FTSE Emerging Market ETF (VWO NYSE). There are 3,998 stocks in the portfolio invested in these sectors; Financial Services 24.50%, Technology 17.70%, Basic Materials 8.81%, Consumer Cyclical 8.62%, and Consumer Defensive 8.04%.
Regional allocation is as follows; Asian Emerging 50.25%, Asia Developed 15.8%, Latin America 15.46%, Africa/Middle East 10.3%, and Europe Emerging 7.69%. The dividend yield offered is 0.66% which indicates that investors should be interested in this fund for growth not income.
A run at the charts will help identify the trend, support, and resistance associated with this EFT.
The three-year chart displays a long decline that started in April of 2015 near the 52-week high of $42.50. The retreat lasted until January of 2016 when VWO hit a 52-week low of $27.50. The MACD and the RSI generated sell signals near the April 2015 high and buy signals near the 2016 low. The advance that came off the low in January ran to resistance near $36.00 in April and has pulled back.
The six-month chart indicates that VWO was oversold in January which attracted the attention of astute investors looking to catch a ride on a beaten down asset. The pullback that started at the April top found support near $32.50 while the momentum indicators signalled a buy. At present there are indications that there could be more to this recent move higher with the caveat that resistance comes in near $35.50
VWO is definitely an investment for those with an appetite for risk given the regional allocation and the volatility exhibited on the charts.
Next time I will conclude Roger’s assignment with a probe of the Utilities Sector SPDR Fund ( XLU NYSE).
Make it a profitable day and happy capitalism!