Let’s compare:

  • SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) is up 4% year-to-date
  • SPDR S&P 500 ETF (NYSEArca: SPY) is up 4% year-to-date
  • iShares MSCI Emerging Markets (NYSEArca: EEM) is down 1.5% year-to-date
  • Vanguard Emerging Markets (NYSEArca: VWO) is down 1.4% year-to-date

Who gets the edge? When you look at the broad indexes and ETFs, the United States is doing slightly better. But don’t take that to mean developing markets have fallen out of favor; there are many emerging countries doing much better than developed ones.

If you can’t really give the win to either market type, then consider that S&P 500 companies with more than half of their revenue coming from overseas are expected to see sales increase 10% as compared to the 6% gain in total sales for companies that target the domestic market. Investing in multinational American companies with emerging market exposure will help mitigate some of the risk associated with the developing worked, such as inflation and political changes.

For more information on the emerging markets, visit our emerging markets category.

Max Chen contributed to this article.