Emerging markets are a favored investment arena. One of the draws is that the players are always changing. ETFs are abundant in this area as the barriers to investing in emerging markets for individual investors are difficult to overcome. This is why ETFs in emerging markets are increasingly popular and growing. Each year there are more and more ETFs providing exposure to emerging markets. Here are four ETFs that are not even one year old.
The iShares Emerging Markets Dividend Index Fund (DVYE) is the newest emerging markets ETF on the market with an inception date of Feb. 23. The breakdown of the ETF by sector and by country is highly appropriate for both growth and profit in the coming years. The top five countries with exposure in this ETF are Taiwan, Brazil, South Africa, Thailand, and Turkey. These countries are favorites among many emerging markets investors. Turkey is slowly sliding into place as an all-out perfect candidate for investment. As far as the sector breakdown, the top sectors in this ETF are industrials and telecommunications. Telecommunications is a high growth industry with regard to emerging markets. Perhaps one of the best parts of this ETF is the 6% yield.
The iShares MSCI Emerging Markets Minimum Volatility Index Fund (EEMV) is still fairly new itself, not even a year old. However, as its name suggests, EEMV seeks more low-volatility options. For that reason, some sectors or countries with the highest potential for growth -- i.e., the most risk -- are not included in this ETF's top holdings. The top sectors in this ETF are financials and consumer services. The top five countries with exposure in this ETF are Taiwan, China, South Korea, Malaysia, and Brazil. This ETF seeks for more guaranteed growth and, as such, is risk-averse. This low-risk option also includes a lower yield of 3%.
The iShares MSCI Emerging Markets Growth Index Fund (EGRW) is also one of the newer ETFs in the lineup, also with an inception date in February of this year. This ETF seeks a price and yield correspondence for optimum growth; its breakdown entails that. The top sectors in this ETF are information and financials. The top five countries with exposure in this ETF are China, South Korea, Brazil, Taiwan, and South Africa. So far Taiwan is the only common denominator in these three ETFs, making it easy to see that Taiwan is considered a safe bet among emerging markets analysts. This ETF's yield is lower at around 1.3%.
The iShares MSCI Emerging Markets Small Cap Index Fund (EEMS) is the older ETF among the group, though it is still not yet a year old. This ETF tracks small-cap stocks throughout emerging markets. The sector breakdown is quite a bit different than with the other ETFs, with materials and real estate in the lead. Taiwan, South Korea, China, South Africa, and India are the top five countries with exposure in this ETF. Again, Taiwan remains a common denominator. The yield for this ETF is nearing 4%.
Again, emerging markets offer a great investment value. Although any of these ETFs would make a great addition to any portfolio, DVYE is the real standout in this group. It is not similar to the others in terms of sectors or countries. Also, it has a higher yield than the other ETFs. The inclusion of Turkey exposure, which is highly sought after and difficult to get, makes the ETF that much more enticing. However, each of these options provide the investor with exposure to emerging markets, thus fulfilling the purpose.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.