For investors seeking momentum, iShares MSCI Emerging Markets ETF (EEM - Free Report) is probably on radar now. The fund just hit a 52-week high and is up 31.5% from its 52-week low price of $33.94/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:
EEM in Focus
EEM provides exposure to large and small-cap companies in emerging markets. Holding 853 stocks, it is well spread across components with none holding more than 4.71% share. The fund has key holdings in information technology and financials. Chinese firms take the top spot with nearly 29% of assets while South Korea and Taiwan round off the next two spots. It charges a higher 72 basis points in annual fees (see: all the Broad Emerging Market ETFs here).
Why the Move?
Emerging markets have been an area to watch lately given that threats of political uncertainty in the U.S. have raised the appeal for these stocks. Additionally, a subdued dollar, inexpensive valuation and improving economic growth in many parts of the developing world continue to act as catalysts for the emerging market stocks.
More Gains Ahead?
Currently, EEM has a Zacks ETF Rank #3 (Hold) 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, so there is definitely some promise for those who want to ride this surging ETF a little further.
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