Emerging market (EM) opportunities can reach beyond simply China, India, or Brazil. These next frontier economies are quickly turning things around economically despite global inflation.
The pandemic may have stifled an emerging markets comeback in 2020, but many countries have quickly rebounded amid a global vaccination effort. Russia’s invasion of Ukraine is only helping the economic prospects of these countries as much of the world weans itself off dependence on Russia.
“Though the pandemic and the war in Ukraine are deepening a sense of gloom about the prospects for developing nations, many of these countries are likely to thrive in the coming years,” a Foreign Affairs article notes. “Most nations in Africa, Latin America, and the Middle East are large commodity producers, and their exports will be more valuable as the world reduces its dependence on supplies from Russia.”
Increasing global inflation is only helping with many of these commodity producers. Demand for commodities with rising prices will only help the bottom line and fuel more growth.
“Even before the Russian invasion of Ukraine, emerging economies driven by exports of oil, metals, farm products, and other commodities were poised to rally,” the article adds. “The campaign to build a greener global economy has simultaneously increased the demand for energy and raw materials while making it increasingly difficult to invest in new oil fields, aluminum smelters, or copper mines.”
An Emerging ETF Opportunity
Given these prospects for exponential growth, investors can give the Global X Next Emerging & Frontier ETF (EMFM) a closer look. EMFM seeks to improve upon traditional emerging market (EM) funds by excluding the slower-growing, developed EMs of Brazil, Russia, India, China, South Korea, and Taiwan, while including higher growth potential frontier markets.
EMFM offers investors:
- High growth potential: EMFM seeks to improve upon traditional emerging market (EM) funds by excluding the slower-growing, developed EMs of Brazil, Russia, India, China, South Korea, and Taiwan, while including higher growth potential frontier markets.
- Broad geographic exposure: In a single trade, EMFM offers access to 200+ securities from more than two dozen emerging and frontier market countries.
- Multi-sector approach: In addition to balancing geographic exposure, EMFM tracks an index that caps sector concentration at 30%, ensuring that stocks are selected from a range of industries.
For more news, information, and strategy, visit the Thematic Investing Channel.