January 22, 2008 at 2:00 pm by Tom Lydon
Exchange traded funds (ETFs) within the realm of niches and emerging markets may not always be what they seem.
As an investor, it is up to you to do your research and take notice of what the ETF holds, because in some cases, you may be surprised.
Rob Mackinlay for InvestEgate explores the issue.
Deborah Fuhr for Morgan Stanley also points to the iShares Emerging Markets ETF (EEM), which has a 4.8% tracking risk, while the U.K. version has a 1.8% tracking risk. If an ETF is to track a broad-based index in a developed country, it should do so accurately. Variations are occurring between ETFs that track the same indexes or sectors.
Fuhr expects the global growth of ETFs to match that of 2007’s, so be ready to scrutinize new funds.
Tags: Emerging Markets, Sector ETFs
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