For exchange traded funds (ETFs) there are emerging markets and developed markets, but how about all-world?
Gary Gordon at ETF Expert explains that, for the past five years, the more investors moved into international stock assets, the more growth they saw in their portfolios. The heightened exposure to less developed regions yielded better results. Emerging assets have grown so much that now the interest in "frontier" markets is skyrocketing. China and India are yesterday’s news while Vietnam, Zimbabwe and Panama are desired.
There are two views an investor can take on the popularity of growing markets: either that there are great, under-developed nations that are hot and full of opportunity or that the excitement is akin to the dot-euphoria of the ’90s. For that reason, Gordon says why not invest in every country as a way to manage risk?
The Vanguard FTSE All-World ex-US (VEU) does what owning Vanguard Europe-Pacific (VEA) and Vanguard Emerging Markets (VWO) can, but in one investment tool. The risk is cut down, and you can manage accordingly, depending on your investment needs.
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.