The MSCI Emerging Markets Index is up nearly 30% year-to-date, marking an impressive, ongoing resurgence for developing world equities.
Some analysts believe emerging markets stocks can continue delivering upside for investors. However, there are some risks to be mindful of. Historical data points indicate the current bull market in emerging markets stocks could last awhile.
Additionally, some emerging markets funds are among this year’s top asset-gathering ETFs, including the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) and the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO). However, investors looking for truly large gains with emerging markets ETFs can up their risk profiles and consider more target fare, including the following high-flying ETFs.
VanEck Vectors Brazil Small-Cap ETF (NYSEArca: BRF)
Brazilian stocks are among the best performers in the emerging world this year, a sentiment that certainly extends to small-caps. While domestic small-caps are lagging, BRF is up nearly 61% year-to-date.
Brazil, Latin America’s largest economy, is one of the more volatile emerging markets, but some investors believe Brazilian equities still offer upside potential. That means an ETF like BRF is not a risk-free bet. BRF has a three-year standard deviation of almost 36%, which is more than double the same metric on the MSCI Emerging Markets Index.
BRF devotes almost a third of its weight to consumer discretionary stocks and a combined 27.6% of its roster to utilities and materials names.
Global X China Materials ETF (NYSEArca: CHIM)