CEZ has been down 8.74% year-to-date based on Yahoo! Finance performance returns, but VictoryShares president Mannik Dhillon says it’s beneficial for prospective emerging markets investors to not get caught up in short-term returns, but to focus the long-term benefits the asset class can provide a portfolio. While emerging markets may not be appealing in the short-term prima facie, the sector is still a viable strategy for diversification for an investor’s portfolio and offers an attractive profile on fundamental dimensions such as growth and valuation.
“It’s almost contrary in what you’re seeing in the returns,” said Dhillon. “Emerging markets have been volatile, they’ve been hit with a rising dollar and trade wars. But, as a diversifier in a long-term proposition given the valuation gap today, it’s a tremendous place to be.”
Dhillon highlighted the tremendous dividend yield advantage emerging markets offer versus their developed counterparts. For clients seeking income and a lower beta and lower risk profile for emerging markets, investing in the VictoryShares Emerging Markets High Dividend Volatility Wtd ETF (CEY) could offer an interesting solution.
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