Investors can also take a look at the PowerShares FTSE RAFI Emerging Markets Portfolio (NYSEArca: PXH) as a relatively cheap way to capture the emerging markets.
After the bull run, U.S. stocks are either fairly priced or beginning to look expensive. For instance, the S&P 500 Index has a 17.6 price-to-earnings ratio and a 2.5 price-to-book. In contrast, the emerging markets seem relatively untouched. The MSCI Emerging Markets Index has a 12.2 P/E and a 1.5 P/B. [Emerging Market ETF As A Contrarian Play]
Moreover, due to its fundamental indexing methodology, PXH leans toward value stocks. Consequently, it shows a relatively cheap 9.2 P/E and a 1.2 P/B.
Lastly, investors can use something like the Guggenheim Enhanced Short Duration Bond (NYSEArca: GSY) as an alternative to money market funds with close to zero percent yields. The actively managed GSY has an ultra-short 0.27 year duration but comes with a 1.28% 30-day SEC yield.
The ultra-short-duration bond ETF can be used to weather a rising rate environment. Furthermore, if the consumer prices continue to fall and we end up with persistent deflationary pressures, the purchasing power of the U.S. dollar increases. Consequently, investors can also look at a short-term ETF that act as cash alternatives. [ETF Options to Hedge Against Falling Prices, Low Inflation]