The S&P 500 is up 21.3% year-to-date, while the Vanguard FTSE All-World ex-US (NYSEArca: VEU) exchange traded fund (ETF) is up 35.7%. It’s no wonder, then, that investors are increasingly looking internationally in search of higher returns. (Six benefits of global investing).

Rising productivity, economic and financial reforms and favorable demographics are all reasons that support the notion that global markets, especially emerging markets, will continue to grow and prosper. (Know your emerging market ETFs).

Sheryl Nance-Nash of the Daily Finance cites several more reasons for the increasing attractiveness of emerging markets:

  • A shift in focus in these markets, from agriculture to industry and services
  • Growth in labor forces
  • Deepening capital markets
  • The adoption of technology that has improved efficiency
  • Many domestic corporations are starting to look globally to expand revenue base and make up for a weak U.S. economy;  Case in point: Texas will export $117 billion abroad this year alone, reports Brandon Butler of Worchester Business Journal. Massachusetts exported $17 billion (Why consider emerging markets?)

For more on global ETFs, visit our global ETF category.

There are a variety of ways to get exposure to global markets, from broad funds, to regional funds, to single-country ETFs. The more narrow you get, the greater your risk, so have an exit strategy ready to be used if you need to sell. (How to follow trends).

  • iShares MSCI Emerging Markets Index (NYSEArca: EEM): up 62.3% year-to-date

  • Vanguard Emerging Market Stock ETF (NYSEArca: VWO): up 71% year-to-date

For full disclosure, Tom Lydon’s clients own shares of VEU, VWO and EEM.

Kevin Grewal contributed to this article.

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.