Despite the relative weakness year-to-date in emerging markets ETFs, other market experts may view them as underpriced based on a price-to-estimated earnings ratio that is at its lowest within the last two years. The ratio for the MSCI Emerging Markets Index is below its historical average of 11.4, reaching about 11.2–signs that possible buying opportunities exist.
“We recommend sticking with markets with strong fundamentals and companies with strong balance sheets. China’s growth is poised to benefit from policy support in the near term. China and India are two of our top EM Asia equity picks,” adds BlackRock.
For more ETF trends in emerging markets, click here.
Tom Lydon’s clients own shares of VWO.