Market watchers continue to see the the Fed and President Trump policy moves as key drivers in the direction of emerging market assets. The Fed would affect monetary policy changes that could strengthen the U.S. dollar or weaken the appeal of emerging market currencies. Furthermore, Trump has voiced protectionist rhetoric that could affect the way the U.S. does business with its global peers.

“Rather than valuations or the dollar, the best case for EM equities ties back to global growth,” said BlackRock. “Although global GDP is difficult to measure in real time, historically, changes in industrial metal prices have been a reliable proxy. If emerging markets are a levered play on global growth, they should be more inclined to outperform when industrial commodities are rising. Historically, this is exactly what has happened.”

IEMG and EEM are two of the top 10 asset-gathering ETFs to start 2018.

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

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