Words of Caution on Emerging Markets ETFs

India, Asia’s third-largest economy, is widely believed to be one of the sturdier emerging markets, but U.S.-listed ETFs tracking Indian stocks have struggled over the past year. Over the short-term, India has benefited from cheap energy prices as the country is one of the largest importers of crude oil. Looking further out, economic reforms, including more business-friendly and growth-oriented policies, could help support growth over the medium-term.

“The story may not be all bad for emerging markets. In a Tuesday note, Kevin Caron and Chad Morganlander of Stifel wrote that emerging markets have been brought up to a neutral weighting as valuations compared to the S&P 500 start to look more attractive,” according to CNBC.

Vanguard FTSE Emerging Markets ETF

Tom Lydon’s clients own shares of EEM.