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Broad Emerging Market ETFs List
(click on symbol for data and articles)

"Total" Emerging Markets ETFs
iShares MSCI Emerging Markets Index Fund (EEM)
PowerShares FTSE RAFI Emerging Markets Portfolio (PXH)
SPDR S&P Emerging Markets ETF (GMM)
Vanguard Emerging Markets ETF (VWO)
GlobalShares FTSE Emerging Markets Index Fund (GSR)
Schwab Emerging Markets Equity ETF (SCHE)

Dividend Emerging Markets ETFs
WisdomTree Emerging Markets High-Yielding Fund (DEM)

Multi-Region (but not Total) Emerging Markets ETFs
BLDRS Emerging MKTS 50 ADR Index Fund (ADRE)
Claymore/BNY BRIC (Brazil, Russia, India, China) ETF (EEB)
streetTRACKS SPDR S&P BRIC (Brazil, Russia, India, China) 40 ETF (BIK)
iShares MSCI BRIC Index Fund (BKF)

Latin America Regional ETFs
iShares S&P Latin America 40 Index Fund (ILF)
SPDR S&P Emerging Latin America ETF (GML)

Leveraged Latin America Regional ETFs
Direxion Daily Latin America 3x Bull Shares (LBJ)
Direxion Daily Latin America 3x Bear Shares (LHB)

European Emerging Markets Regional ETFs
iShares MSCI Emerging Markets Eastern Europe Index Fund (ESR)
SPDR S&P Emerging Europe ETF (GUR)

Middle East and Africa Regional ETFs
SPDR S&P Emerging Middle East & Africa ETF (GAF)
Market VectorsGulf States Index ETF (MES)
Invesco PowerShares MENA Frontier Countries Portfolio (PMNA)
WisdomTree Middle East Dividend Fund (GULF)

Frontier Markets
Claymore/BNY Mellon Frontier Markets ETF (FRN)

What Are They?

  • Broad and Regional Emerging Market ETFs cover multiple emerging countries' stocks in a single ETF. Those markets include countries in Eastern Europe and South America, as well as developing countries in Asia such as China and India.
  • These ETFs are typically based on market-cap weighted indexes, and are therefore dominated by large cap stocks.

Why & How To Use Them

  • Emerging market stocks are a distinct asset class, and are an important part of any diversified portfolio. What we've called "Total" Emerging Markets ETFs allow you to include a wide selection of emerging market stocks with a single ETF, making it easy to build and maintain a diversified portfolio.
  • Emerging markets have outperformed developed markets in recent years, and many investors think they will continue to do so due to the rapid economic growth of countries like India and China and the current account surpluses many emerging market countries are now running versus the USA.
  • Emerging market stocks tend to be more volatile and risky than US or European stocks. That means that investors need to use these ETFs carefully; but the volatility also provides an opportunity for short-term traders.
  • Due to their breadth and liquidity, these ETFs tend to be cheaper than single country ETFs, with lower expense ratios and fairly narrow bid-ask spreads. In most cases, their costs are significantly lower than those of emerging markets mutual funds.

What to Look Out For

  • There are significant composition differences between even the "Total" Emerging Markets ETFs. For example, some cover Russia while others don't. These differences in composition can lead to significant differences in performance.
  • There can be wide differences in expense ratios between emerging market ETFs. Research them carefully.
  • Vanguard ETFs tend to have extremely low expense ratios and low tracking error (divergence from their benchmarket indexes). But they also have a different structure (see Further Reading below) that might lead to lower tax efficiency for long-term investors.

Further Reading

This page is part of The Seeking Alpha ETF Selector which sorts ETFs by type, highlights how to use them and what to look out for, and provides links to articles that discuss key issues for investors.

Source: Broad Emerging Market ETFs