Although the pace may eventually slow down, Barron’s reports that emerging markets still have room left to grow in the long haul. And for the time being, they may be the place to hide out as developed markets still work toward normalcy. In the near-term, growth rates in developed nations are expected to be lackluster, and much less robust than those in the developing world’s. (What you’re missing when you’re not globally invested).

Countries that are resource rich and developing are stockpiling cash and shoring up their balance sheets for a strong recovery and a growth spurt unlike any seen before. Earnings and  economic activity have been revived. Morgan Stanley feels that earnings in emerging markets have bottomed in the third quarter and they’re now set to climb again. (Why frontier markets could be even bigger).

For more stores about emerging markets, visit our emerging markets category.

There are a variety of ways to play emerging markets. There are broad funds, such as iShares MSCI Emerging Markets (NYSEArca: EEM), Vanguard Emerging Markets (NYSEArca: VWO) and iShares MSCI EAFE Index (NYSEArca: EFA).

There are funds that focus on regions, such as Claymore/BNY Mellon BRIC (NYSEArca: EEB) and BLDRSAsia 50 ADR Index (Nasdaq: ADRA).

Finally, there are single-country funds, such as iShares MSCI Brazil (NYSEArca: EWZ) and Market Vectors Vietnam (NYSEArca: VNM).

Keep in mind that the narrower you get in your exposure to emerging and frontier markets, the higher your risk will be. Be sure to have an entry and exit strategy before you invest. (How to follow trends).

Brazil is one step closer to joining the ranks of developed nations: its middle class is growing. For a country long divided between a small, wealthy elite and a vast army of have-nots, it’s a positive development that many believed was a long shot just a few years ago. (An investment upgrade by Moodys is also proof of the stable economy).

Alibaba reports that the true definition of a middle class is hard to define. Brazil uses a five-tier system to classify population by money. The middle tier, called Class C, comprises those with household income between 1,115 and 4,807 reals per month ($641 to $2,763). (What Brazil’s foreign investment tax means). This segment has ballooned to more than half the country’s total population.

The benefits of Brazil’s bigger middle class include:

• Programs have lifted 19 million people out of poverty and into this class
• They’re grabbing status symbols such as televisions and cars; new car sales jumped 20% in September
• The middle class can press for social change, improved schools and stronger political institutions
• They put a higher premium on citizens’ rights, such as multi-party elections and free speech

Mina Kimes for CNN Money reports that unemployment is down from its March peak, wages are up, and the Bovespa index, which tracks the country’s biggest stocks, has climbed 77% so far this year.  (Seven things to like about Brazil).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 92.6% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 64.5% since May inception

Turkey. Turkey is rapidly developing and there’s no indication that the economy needs aid from the International Monetary Fund (IMF). Growth in the economy could likely accelerate in 2011 after a return to growth in 2010. Turkey’s market index has been driven up by the banking sector, which makes up around 40% of the market. Bank earnings have been bolstered by a series of rate cuts that have reduced interest on customers’ deposits as lending rates remain high. (Does Turkey need more support?)

• iShares MSCI Turkey Invest Mkt Index (NYSEArca: TUR): up 179% since low; up 101.6% year-to-date

Russia. Next year’s growth could top 2% if oil prices stay high. Greater revenues from taxes on energy companies could also ensure this year’s budget deficit is smaller than expected. Economists believe Russia’s GDP growth may gain a foothold as soon as the fourth quarter because of fiscal stimulus. Additionally, the economy will pick up speed once oil prices increase and world economies recover. The Russian economy is dominated by resources and banking. (Russia’s potential stumbling blocks).

• Market Vectors Russia (NYSEArca: RSX): up 161% since low; up 139.5% year-to-date

Brazil. Brazil could sustain average annual economic growth of 5% over the next 10 years. Low inflation and sound fiscal policy have released a tide of investment in Brazil. For now, Brazil’s small-caps are benefiting from the carry trade. Companies are hiring workers to meet growing demand for manufactured goods and new homes. In 2010, Brazil’s economy is expected to grow 4.4%; this year, growth is expected to be around 0.12%. (Seven things to like about Brazil).

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 125% since low; up 114% year-to-date

India. The Indian Prime Minister’s Economic Advisory Council expects the GDP to expand 6.5% to 6.75% in 2009-10, despite a potential decline in agricultural output. Inflationary concerns may be met by tighter monetary and fiscal policies in the coming months. Factors such as capital flows, domestic demand, portfolio flows and a strong savings rate have India in a good position to continue moving forward. (Why India could strengthen).

• WisdomTree India Earnings (NYSEArca: EPI): up 138% since low; up 88.2% year-to-date

Indonesia. A young population and a falling birth rate equate to a surge in the ratio of working population to the number of dependents. Circumspect fiscal policy has left the government with enough cash for infrastructure and public services. Indonesia may enjoy a period of political stability and does not rely too heavily on exports. Declining interest rates have helped boost consumption, which is around 60% of GDP. (Five points in Indonesia’s favor).

• Market Vectors Indonesia ETF (NYSEArca: IDX): up 180% since the low; up 155.6% since Jan. 20 inception

Max Chen contributed to this article.

To understand the implications of the new tax, it’s important to understand how iShares MSCI Brazil (NYSEArca: EWZ) works.

EWZ is a “cash create” product, unlike most ETFs where delivery is taken in the form of securities. Regulations in Brazil don’t allow in-kind share creations. Cash is taken in lieu of actual shares, and the money is taken and invested in Brazil.

When a market participant (MP) wants to create more shares of EWZ, there’s a fee associated with this creation that’s already built in. This new tax may eventually become a part of the fund expenses in the event that an increase in demand for EWZ leads to the creation of more shares.

According to its prospectus, Market Vectors Brazil Small-Cap (NYSEArca: BRF) also issues and redeems creation units primarily for cash.

Anything already issued in any fund is not impacted because it’s already in the local currency.

Meanwhile, money is flooding into Brazil. About $31 billion in foreign direct investment is expected this year. In turn, this news has upped their stock market and increased the value of the currency. The risk Brazil runs is the real getting too strong, which is a new problem for a country that has usually had to deal with inflation, reports Carl Mortished for Times Online.

This is what led to the tax: the country feared losing its foreign customers and exporters raised a ruckus, hence the 2% tax. While investors and the International Monetary Fund (IMF) initially balked, for the most part investors seem to feel the positives of growth prospects in Brazil outweigh the negatives of the tax.

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 116.3% year-to-date

• Market Vectors Brazil Small-Cap (NYSEArca: BRF): up 86.7% year-to-date

• WisdomTree Dreyfus Brazilian Real (NYSEArca: BZF): up 34% year-to-date

Taking advantage of a recent sovereign debt upgrade, Brazil will raise about $1 billion in issuing global bonds that mature in January 2041 at a price guidance of 5.85%, write Rogerio Jelmayer and Claudia Assis for NASDAQ. Brazil’s investment-grade rating has allowed the country to issue bonds with longer maturities and lower debt service costs. (Read more about sovereign debt here).

Demand for Brazilian debt is strong and some participants except the Brazilian Treasury to increase volume up to $1.5 billion. Brazilian companies and banks raised around $3.65 billion from overseas bonds.

• PowerShares Emerging Markets Sovereign Debt (NYSEArca: PCY): up 37.5% year-to-date; Brazil is 4.3%

Brazil pledged its support to the International Monetary Fund (IMF) as a world emergency lender, reports Antonio Rodriguez for AFP. Brazilian Finance Minister Guido Mantega stated the government will spend $10 billion in IMF bonds to augment the fund’s resources.

The IMF projects Brazil’s economy will contract 0.7% this year and grow 3.5% next year. (More information on Brazil’s performance this year can be found here).

Emerging market economies are seen as leading the current global recovery. These countries are growing more influential through the Group of 20 (G20) and potentially gaining more voting rights in the IMF and World Bank.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 100.8% year-to-date

For more information on Brazil, visit our Brazil category.

Max Chen contributed to this article.

Brazil’s economy has already been humming along, but two major sporting events could just be the icing on the cake: Rio de Janeiro has been tapped to host the 2016 Summer Olympics and Brazil will also host the 2014 World Cup soccer championship.

Other points in favor of the growing country’s economy, according to Charles Kraul for The Los Angeles Times:

• The International Monetary Fund (IMF) predicts that Brazil will outperform Mexico in 2009
• Consumer spending in Brazil is a big part of the country’s success; government incentives have also helped
• The government mandates that subsidized loan rates on homes and appliances be underwritten by state-owned lenders
• Public sector jobs have been added and welfare payments have been increased by 30%
• Brazilian interest rates are at 8.5%, the lowest they’ve been in history in real terms

There are several ways to play Brazil’s growth story with ETFs. The most direct is the single-country fund, iShares MSCI Brazil (NYSEArca: EWZ). It’s up 90.1% year-to-date. The fund has its heaviest weightings in materials and financials, which make up more than 50% of the fund. The materials sector could especially benefit as Rio builds the necessary buildings and stadiums to host the Olympics.

Another play is the Market Vectors Brazil Small-Cap (NYSEArca: BRF), which is up 12.7% in the last month. Small-caps tend to do well in a recovery, and this fund also has heavy weightings in consumer discretionary, industrials and materials – all areas that could benefit while Rio builds up and starts selling Olympics-related products.

The Brazilian real is also on what many analysts say is a sustained uptrend. This year so far, it’s the world’s second-best performing currency and it’s on track to rally for an eighth consecutive month, report Fabio Alves and Paulo Winterstein for Bloomberg. Next year, Brazil’s IPOs could double as the stock market continues to rally. One analyst believes that the real will rally to 1.80 per dollar by the end of this year. WisdomTree Dreyfus Brazilian Real (NYSEArca: BZF) is up 28.7% year-to-date.

For more diversified exposure, both iShares MSCI Bric (NYSEArca: BKF) and Claymore/BNY BRIC (NYSEArca: EEB) have heavy weightings in Brazil, along with exposure to the other four BRIC countries (India, Russia and China). They’re up 64.4% and 64.2% year-to-date, respectively.

For more stories about Brazil, visit our Brazil ETF category.

The possible upgrade of Brazil to investment-grade is good news for the country’s financial sector and its economy as a whole. Peter Medved for Seeking Alpha reports that in late August, the country’s finance minister Guido Mantega said that the announcement that Moody’s would join both Fitch and Standard & Poor’s in giving Brazil an investment-grade rating should come in September.

The sector to benefit the most will be the financial sector, which has suffered from the country’s ceiling on foreign currency debt and deposit ratings. After an upgrade, the major banks should be able to ascend the ratings ladder. The timing is key, too, because two banks in the country are aiming to launch IPOs in the fourth quarter, along with ADR listings on the New York Stock Exchange.

Retail investors should also enjoy this good news, as a better rating will lead to improved investor sentiment and a possible continued uptrend.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 92.1% year-to-date; financials are 19.6%

For more stories about Brazil, visit our Brazil category.

The economic crisis has dwindled enough in Brazil for the country to see the light, but Brazil’s National Confederation of Industries wants to see more of an industrial rebound before a concrete end to the recession can be called.

Gerald Jeffries for The Wall Street Journal reports that second-quarter growth figures remain good for Brazil. The CNI recognized that the latest data showed that the worst of a recent slowdown had passed. Local industry is anticipated to drag for the coming quarters as it overcomes an 8.6% contraction in the first half of the year.

Joshua Goodman and Andre Soliani for Bloomberg report that Brazil has experienced six months of job growth, supplemented with tax breaks, low borrowing costs and elevated consumer spending to bring Latin America’s strongest economy into recovery mode.

• iShares MSCI Brazil Index  (NYSEArca: EWZ): up 79.9% year-to-date

For more stories about Brazil, visit our Brazil category.

Analysts credit the falling interest rates mixed with the government stimulus as the main contributers for growth stimulation. Among the other reasons Brazil could continue to grow as a global recovery tightens its grip:

• In the 12 months to June, foreign direct investment hit $41 billion, up from $30 billion in the previous 12 months
• Consumption has remained in place
• Inflation has remained fairly tame, with the consumer price index moving up just 0.36% in the 12 months to June
• Industrial output rose for the seventh consecutive month in July and posted its biggest gain in more than a year

On the flip side, John Rumsey for Latin Finance warns that distortions may result if the rebound persists to move as quickly as it has. More than $200 billion are still in reserves as the government has been leading the country down a conservative fiscal path. The challenge will come at presidential election time in October 2010, which could make it hard to keep a lid on fiscal spending and reverse monetary easing.

Adriana Brasileiro and Andre Soliani for Bloomberg report that the central bank also lowered the reserve requirement for lenders, encouraging banks to increase loans and putting about $100 billion into the economy. This should give the Brazilian economy an extra dose of energy and encourage consumer spending further.

• iShares MSCI Brazil Index (EWZ): up 63.7% year-to-date

For more stories about Brazil, visit our Brazil category.