"Our latest pick combines two highly profitable asset classes, small caps and emerging markets," says Nicholas Vardy. In The Global Bull Market Alert, he an emerging markets ETF.
"The SPDR S&P Emerging Markets Small Cap ETF (NYSE: EWX) offers you access to small caps in emerging markets that otherwise would be off limits.
"While some of the larger emerging market stocks trade in the United States, these smaller players never will.
"In addition, it's well known that U.S. small caps tend to outperform large caps over the long run. Their small size makes them nimble and quicker to react to changing market conditions.
"Small caps in emerging markets are no different. This year, emerging market small-cap ETFs like EWX are outperforming their large cap counterparts by a comfortable margin.
"Finally, EWX is well-diversified. Consumer goods make up 18.7%; materials, 18.2%; financial, 21.1%; and smaller positions in such areas as energy, utilities, health care, and consumer services.
"In terms of countries, Taiwan has a 30.5% weighting, followed by China (10.9%), South Africa (10.2%) and Brazil (8.8%). But you also get exposure to companies as far afield as Poland, Turkey, Israel, Morocco and Indonesia.
"Here's a word of warning. Small-cap emerging market companies are riskier, (and hence more volatile) than traditional (already quite volatile) emerging market investments.
"Also, for full disclosure, this is a position that I may purchase in the future for my own clients at my investment firm Global Guru Capital."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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