Last year was a stellar year for emerging market exchange traded funds. As we posted in January, the top ETF performers were Latin America, South Korea, Brazil and Mexico, each having returns in excess of 44% for 2005.
Can this trend continue? Carl Delfeld finds arguments about the future of emerging markets. One view is that PE ratios for emerging markets are still cheap, even with the recent run up in prices. For example the emerging market PE is 11 and Brazil’s is 10.
Delfeld notes there will be some pullbacks in countries and regions depending on specific circumstances. However, the emerging markets are in much better shape now than they were in the 1990s.
Here is a look at this year’s performance for 2005’s top ETFs – iShares S&P Latin America 40 Index (ILF) 11%; iShares MSCI South Korea (EWY) -1%; iShares MSCI Brazil (EWZ) 19%; BLDRS Emerging Markets 50 ADR (ADRE) 6% and iShares MSCI Mexico (EWW) 3%.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.