So, you want to invest in emerging markets. Why torture yourself with the arduous process of single-stock picking when exchange traded funds (ETFs) have made it all so much easier.
If you’re just starting out with your emerging market investing, consider a broad fund. Although they’re also a great way to get exposure to a single economy, broad funds cover an entire region, giving the benefits of diversification and risk management. If you’re new to this area, you can get a taste without taking on too much risk. [Top 5 Emerging Market ETFs.]
Carl Delfeld for Investment U reports that when you invest in a broad-based ETF, you are challenging a broader index that weights countries based on their market value rather than future growth potential. [ETF Strategies For Foreign And Emerging Markets.]
Emerging markets now represent 83% of the world’s population, more than 50% of global growth and 34% of global GDP, so they shouldn’t be neglected. Improvements in technology and communications, economic reforms and infrastructure building may well help this trend continue.
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- iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM)
- Vanguard Emerging Markets (NYSEArca: VWO)
- Emerging Global Shares Emerging Markets Large Cap (NYSEArca: EEG)
Tisha Guerrero 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.