Be Picky With Emerging Markets ETFs

Investors have been picking off some trouble areas, including Brazil, Russia, Turkey and South Africa.

The falling oil prices are hitting countries with significant energy industry exposure. For example, the Market Vectors Russia ETF (NYSEArca: RSX) includes a 43.1% tilt toward energy stocks. Still, Russia has been under duress even before the drop in oil prices as escalating tensions with Ukraine and Western sanctions weigh on the Russian markets. [Sanctions Could Pressure Dividends for Russia ETFs]

Additionally, market-unfriendly policies and political volatility have weighed on other emerging market ETFs, including the iShares MSCI South Africa ETF (NYSEArca: EZA), iShares MSCI Turkey ETF (NYSEArca: TUR) and iShares MSCI Brazil Capped ETF (NYSEArca: EWZ). Year-to-date, EZA is up 3.3%, TUR is 9.1% higher and EWZ is down 7.8%.

SPDR S&P Emerging Asia Pacific ETF

For more information on developing economies, visit our emerging markets category.

Max Chen contributed to this article.