The FTSE Emerging Index and the MSCI Emerging Markets Index are both cap-weighted, and the indices are very similar. The omission of South Korea is the major differential, and the country itself is very cyclical since it is a heavy technology manufacturer. As far as performance, there is a tight correlation between the two indices over the past three years, according to Morningstar. [Looking Beyond the Usual Suspects in Emerging Markets ETFs]
For those investors who are interested in a dividend approach to emerging markets, Morningstar says there are the following ETFs to consider for exposure:
- WisdomTree Emerging Markets Equity Income (NYSEArca: DEM) yields 3.7%
- SPDR S&P Emerging Markets Dividend (NYSEArca: EDIV) yields 6%
Vanguard MSCI Emerging Markets ETF
Tisha Guerrero contributed to this article.
