Investors who own any exchange traded funds (ETFs) in emerging markets can begin to stop holding their breaths. The major correction enhanced by a five year rally for the sector may not even occur. The main point is that markets were able to rebound from the take over in Thailand so there is proving to be a new resilience in emerging markets. Barbara Kollmeyer of MarketWatch.com reports that valuations, financial resources and balances in the past five years are enough to keep this sector afloat.
The major countries in emerging markets-Brazil, Russia and China, are equipped with healthy account surpluses. As long as Brazil, Russia, China and India, stay healthy, growing and forward progressing, the sector should be alright.
Emerging markets are off to a slow beginning for 2007, according to MSCI data, BRIC markets are down 2.8%. iShares MSCI Emerging Markets (EEM) picked up 1.8% on Friday. Industry insiders say the biggest threat is the level of liquidity splashing around.
For full disclosure: Some of Tom Lydon’s clients own EEM.
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.