ETF Trends
ETF Trends

An exchange traded fund (ETF) tracking emerging markets is set to rally 14% as central banks wind down the pace of monetary tightening, Goldman Sachs says.

Easing food inflation and economic growth in China should also power emerging markets, Goldman analysts said, according to a Bloomberg report.

Emerging markets stocks have “underperformed developed market equities very sharply,” Goldman noted, but that trend may reverse.

The analysts put a price target of $55 a share on iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM), roughly 14% higher than the ETF’s closing price Wednesday.

Similar funds such as Vanguard MSCI Emerging Markets ETF (NYSEArca: VWO) have traded in a range since late 2010 but are threatening to break out to the upside. The Vanguard ETF was up 4.7% for the month ended March 30, according to Morningstar.

The opinions and forecasts expressed herein are solely those of John Spence, 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.