VanEck launched the VanEck MSCI EM Analyst Sentiment ETF (NASDAQ:VEEM), giving investors exposure to emerging market stocks with improving analyst outlooks.
The ETF tracks the MSCI EM Analyst Sentiment Select Index, which scores companies based on revisions to earnings-per-share, sales, cash flow, price targets and buy/sell recommendations. The strategy selects 100 stocks while applying country, sector and security-level constraints. The index is rebalanced quarterly.
VEEM is the emerging markets counterpart to VanEck’s recently launched MSCI EAFE Analyst Sentiment ETF (NASDAQ:VEFA), extending the firm’s analyst-sentiment strategy across international developed and emerging markets.
QUICK CONTEXT: Analyst Revisions Become ETF Strategy
Analyst sentiment can offer a forward-looking signal beyond simply looking at a company’s past performance. VEEM uses revisions across five areas — EPS, sales, cash flow, price targets and buy/sell recommendations — to identify companies where Wall Street’s outlook is improving.
The strategy comes as emerging markets attract renewed attention, helped by expectations for stronger earnings growth, cheaper valuations relative to developed markets and a softer U.S. dollar. Rather than simply tracking the broad emerging-markets universe, VEEM seeks to tilt toward companies where analyst expectations are moving in a positive direction.
The ETF selects 100 stocks from the emerging-markets universe and uses constraints designed to limit tracking error to 4% versus the MSCI Emerging Markets Index. Its quarterly rebalancing means the portfolio can adjust as analyst expectations change.
The approach adds another factor-based option for investors looking beyond traditional market-cap-weighted emerging market ETFs.
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