Beyond the BRICs – Other Emerging Market ETFs

November 10, 2009 at 3:00 pm by Tom Lydon

The BRICs (Brazil, Russia, India and China) have gotten the majority of investor attention, but there are other worthy emerging market exchange traded funds (ETFs) that lie outside their boundaries.

Many countries that fall under the emerging and or frontier market categories get overlooked, overshadowed by the BRIC wall. Some analysts say if you’re not looking at some other markets, you could be leaving a wide-open hole in your portfolio.

How much should be allocated to your portfolio, though, is a matter of debate.

Alexandria Zendrian for Forbes explains that a 50% emerging markets weight is not recommended, but at least 30% should be international. The average portfolio has about a 2% allocation to emerging markets, which is underweight considering that two-thirds of the global market cap lies outside the United States. (Why consider frontier markets?)

There are many other economies besides China, Brazil, Russia and India that are emerging, and they have made it through the financial crisis better than most. Eastern Europe is an area that has made it through the banking crisis well, and has overcome a currency problem as well. (Check out other alternative ETFs for BRIC investors).

In fact, eight of the top 10 markets that have performed well over the past quarter are from Eastern Europe. Those top 10 markets are: Lithuania (up 46%), Serbia (39%), Ukraine (39%), Macedonia (38%), Estonia (37%), Russia (35%), Kazakhstan (34.8%), Vietnam (26%), Cyprus (26%) and Argentina (25%). (What you’re missing when you’re not global).

For more stories about frontier markets or Eastern Europe, visit the category.

Other emerging markets investors can consider include: