If you’re risk-averse, consider a broad ETF that gives exposure to several markets or a region. If you’re risk-tolerant, single-country funds can be an appealing option. Additionally, one may also invest in emerging market sovereign debt ETFs as part of a fixed-income strategy. [ETF Strategies for Playing the BRICs.]
But dig under the hood of certain ETFs to ensure that you’re getting the exposure you want (and leaving out the exposure you don’t). For example, Market Vectors Russia (NYSEArca: RSX) has a heavy weighting in energy, while iShares MSCI BRIC (NYSEArca: BKF) holds significant amounts of financials and energy.
We’re not saying those things are bad or good; one person may feel comfortable with financial exposure, while energy exposure is a little too volatile for another person’s taste.
For more information on emerging markets, visit our emerging markets category.
- Vanguard Emerging Markets ETF (NYSEArca: VWO)
- iShares MSCI Emerging Markets Index (NYSEArca: EEM)
- iShares MSCI BRIC (NYSEArca: BKF)
- SPDR S&P BRIC 40 ETF (NYSEArca: BIK)
- iShares MSCI Brazil (NYSEArca: EWZ)
- Market Vectors Russia (NYSEArca: RSX)
- PowerShares India Portfolio (NYSEArca: PIN)
- iShares FTSE/Xinhua China 25 Index Fund (NYSEArca: FXI)
Max Chen contributed to this article.