A sound investment process and strong management team underpin SPDR® S&P Emerging Markets Small Cap ETF's Morningstar Medalist Rating of Bronze. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's sensible investment philosophy merits an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and an overweight in volatility exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And high volatility exposure is rooted in stocks that have a higher standard deviation of returns. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

AlerisLife

PrSh Ult S&P Rg Shs

Membership Collective Group

Star Bulk Carriers

SAP SE

TransUnion

HollySys Automation Technologies

Foley Trasimene Acquisition Corp. II

Aberdeen Income Credit Strategies Fund

Medley Cap 6.5 % Notes 2015-30.1.21

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. SPDR® S&P Emerging Markets Small Cap ETF earns an Above Average Process Pillar rating. The most substantial contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Noteworthy risk-adjusted performance also contributes to the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the process was successful over that period. Lastly, the process is limited by the parent firm's five-year retention rate of 74%, which suggests it could do more to retain its portfolio managers.

The investment strategy as stated in the fund's prospectus is:  The investment seeks investment results that, before fees and expenses, correspond generally to the total return performance of the S&P Emerging Markets Under USD2 Billion Index.  The fund generally invests substantially all, but at least 80%, and of its total assets in the securities comprising the index and in depositary receipts based on securities comprising the index. The index is a float-adjusted market capitalization weighted index designed to represent the small capitalization segment of emerging countries included in the S&P Global BMI. 

 The portfolio is overweight in industrials and basic materials relative to the category average by 12.4 and 5.4 percentage points, respectively. The sectors with low exposure compared to category peers are financial services and communication services, underweight the average by 13.0 and 5.0 percentage points of assets, respectively. The portfolio is composed of 3,539 holdings and is diversified among those holdings. In its most recent portfolio, 2.5% of the strategy's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 25.3%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 29% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

SPDR® S&P Emerging Markets Small Cap ETF's strong equity team drives the strategy's Above Average People Pillar rating. There are two managers listed on the fund: Karl Schneider, Amy Cheng. The team is well equipped, with an average of 19 years of portfolio management experience. Though they do not manage other products together, managers may manage them individually.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR S&P Emerging Markets Small Cap ETF

EWX tracks a market-cap-weighted index of emerging markets securities with small capitalization.

The SPDR S&P Emerging Markets Small Cap ETF (EWX) provides diversified exposure to small-cap companies in developing economies. EWX has historically outperformed broad EM benchmarks and has gained 11% in 2023. The fund's sector and country allocations have contributed to its strong performance, with a focus on technology and underweighting in financials and Chinese stocks.

EWX: Outperforming EM Small-Cap ETF Makes A Great Portfolio Diversifier

SPDR® S&P Emerging Markets Small Cap ETF invests in a large pool of small-cap stocks in emerging market companies that possess strong upside potential, but also possess significantly high risk. 60% of EWX assets are invested in emerging markets of Taiwan, Hong Kong, India, and China, which are growing at a faster rate and are of investment grade. As per IMF reports, these emerging markets are poised for high growth in the coming years. Central banks of these EMs are also effectively controlling the money supply.

EWX: Historically Low-Return Fund Of Small-Caps, Looking Promising Of Late

The SPDR S&P Emerging Markets Small Cap ETF offers investors exposure to small-cap stocks in emerging markets, with significant upside potential and risk. Launched in 2008, EWX has $803.07 million in assets under management as of July 2023 and offers a diversified portfolio with 2980 different equities. Factors supporting investment in EWX include China's economic growth, geopolitical events leading to de-dollarization, and a falling dollar increasing interest in non-dollar assets. However, risks include geopolitical tensions and regulatory challenges.

EWX: Market Diversification And Growth Potential With Commensurate Risks

EWX: The Onus Is On Asia

iShares JP Morgan USD Emerging Markets Bond ETF

Emerging Markets Internet & Ecommerce ETF

iShares MSCI EM ESG Optimized ETF

Schwab Fundamental Emerging Markets Large Co. Index ETF

KraneShares CSI China Internet ETF

SPDR Portfolio Emerging Markets ETF

Vanguard FTSE Emerging Markets ETF

WisdomTree Emerging Markets ex-State-Owned Enterprises Fund

The global economy is expected to rebound sharply this year and next. These are the best emerging market ETFs to leverage this potential source of growth.

10 Best Emerging Market ETFs for Global Growth

Xtrackers Harvest CSI 500 China A-Shares Small Cap ETF

WisdomTree Emerging Markets SmallCap Dividend Fund

iShares MSCI Emerging Markets Small Cap ETF

First Trust Emerging Markets Small Cap AlphaDEX Fund

Emerging markets are poised to soar, but avoid political landmines with small-cap stocks.

Why Emerging Market Small-Cap Stocks Might Mean Big Profits

Columbia Emerging Markets Consumer ETF

Emerging markets ETFs can inject growth into your portfolio, as well as provide some much-needed diversification. Here are 10 top EM funds.

10 Best Emerging Markets ETFs for a Global Rebound

iShares Emerging Markets Dividend ETF

The Case For Emerging Markets Small Cap Value

iShares Edge MSCI Min Vol Emerging Markets ETF

iShares MSCI Russia ETF

iShares MSCI Brazil ETF

Coronavirus might just open up an opportunity for emerging markets (EM) ETF investing.

Is Coronavirus an "Opportunity" for Emerging Markets ETFs?

Emerging markets stocks and the related exchange traded funds are being slammed by the trade wars as confirmed by the MSCI Emerging Markets Index being down nearly 7 percent over the past month.

News for SPDR S&P Emerging Markets Small Cap ETF ETF (EWX)