A Turkey country-specific exchange traded fund has been among the worst performers this year, as the Turkish economy grapples with a weakening lira currency and a high inflation rate. The iShares MSCI Turkey ETF (NasdaqGM: TUR) has declined 16.77% year-to-date.
Many overseas governments are taking swift action to stifle inflation, which bodes well for EM bonds and assets like the Vanguard Emerging Markets Government Bond Index Fund ETF Shares ( VWOB A+ ). One country exhibiting considerable opportunity is Brazil, to which VWOB offers a 4.9% market allocation, as of 5/31/21.
Our view on emerging-market bonds is less optimistic after Federal Reserve policymakers indicated in mid-June that they may raise short-term interest rates sooner than previously expected. Although we had previously suggested investors consider overweighting emerging-market (EM) bonds relative to a benchmark target allocation, we now have a neutral view on EM bonds.
Investors looking for the next batch of rising stars among developing economies have a credible option in Vietnam. That country’s small but rising equity market is accessible via the VanEck Vectors Vietnam ETF ( VNM B ) – an exchange traded fund that’s higher by more than 14% year-to-date.
The widely observed MSCI Emerging Markets Index is up 7% year-to-date. That’s decent, but investors opting for emerging markets exchange traded funds with deeper cyclical value tilts could be doing a lot better. For example, the ALPS Emerging Sector Dogs ETF (NYSEArca: EDOG) is up nearly 13% since the start of the year.
Yield is still at historically low levels, but China’s debt market still offers attractive options through assets like the KraneShares CCBS China Corporate High Yield Bond USD Index ETF (KCCB) . KCCB seeks to provide investment results that, before fees and expenses, track the price and yield performance of a specific fixed income securities index.
India exchange traded funds have been rallying as investors look past the short-term Covid-19 crisis and consider long-term growth potential. Over the past month, the iShares MSCI India ETF (CBOE: INDA) increased 7.7% and the WisdomTree India Earnings ETF (NYSE: EPI) has advanced 9.2%.
It’s difficult to get emerging markets (EM) exposure sans the local currency risk that comes with it. One way to minimize these challenges is the Vanguard Emerging Markets Government Bond Index Fund ETF Shares (VWOB) . VWOB seeks to track the performance of a benchmark index that measures the investment return of U.S. dollar-denominated bonds issued by governments and government-related issuers in emerging market countries.
Seasoned investors know it’s practical to take a long-term view of developing economies – a task made easier with cost-effective assets like the Invesco PureBeta FTSE Emerging Markets ETF (PBEE) . PBEE seeks to track the investment results (before fees and expenses) of the FTSE Emerging Index.
Treasury yields are still elevated and the dollar is still weak. However, both assets recently rallied, indicating there’s room to the downside. That could be to the benefit of emerging markets bonds and the VanEck Vectors Emerging Markets Local Currency Bond ETF EMLC
In the United States, healthcare is a dynamic sector home to defensive value stocks, disruptive growth names, and plenty of in-between. China offers a comparable level of healthcare dynamism, which investors can access with exchange traded funds such as the KraneShares MSCI All China Health Care Indes ETF (KURE) .
Investors can look to a targeted exchange traded fund strategy to capture digital transformation in India. In the recent webcast, Emerging Market Internet Trends: The Rising Generation of Digital Consumers in India , Kevin Carter, Founder and CIO, EMQQ, underscored the opportunity in the emerging economies, such as their favorable demographics that continue to support consumption-based growth.
After suffering through a precipitous plunge, Turkey country-specific exchange traded funds are starting to recover as bargain hunters look to a market that experienced its worst two-day drop in two decades. The iShares MSCI Turkey ETF (NasdaqGM: TUR) rose 3.4% on Wednesday and was testing its long-term support at the 200-day simple moving average.
Emerging markets (EMs) can be a tricky endeavor, which is where adding a factor filter over EM investments can help. But which investment factor to go with? ETF investors can get four factors in one fund via the iShares MSCI Emerging Markets Multifactor ETF (EMGF) .
