Best Emerging Market Countries To Invest In Now

Credit Suisse upgraded its outlook on emerging markets and recommended investors overweight India, South Korea and Taiwan in a mammoth 92-page “Global Equity Strategy” report released Wednesday. The largest exchange traded funds on the stock market providing exposure to the stock markets in these countries are iShares MSCI India (INDA), iShares MSCI South Korea Capped (EWY), iShares MSCI Taiwan (EWT).

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The Value Shift is on in Emerging Markets, Too

The recent woes suffered by momentum stocks and exchange traded funds are well-documented. At this point, it is not a stretch to say plenty of investors are aware that ETFs that were last year’s darlings have fallen out of favor.  That list includes large, well-known funds such as the iShares Nasdaq Biotechnology ETF and the First Trust Dow Jones Internet Index Fund. However, the shift to value sectors and ETFs from momentum plays has not been confined to U.S.-focused offerings. The same rotation is afoot in emerging markets.

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-Igor P Purlantov

Investors Dip a Toe Back in Emerging Markets

 

Despite ongoing concerns about the Russia-Ukraine standoff and a Chinese slowdown, investors are dabbling in emerging markets once again.  Nearly $2.5 billion flowed into mutual funds and exchange-traded funds that invest in emerging market stocks during the week that ended April 2, according to data from EPFR Global.  It was the first time money poured into those funds since October.  The inflow suggests that investors have regained some appetite for emerging market stocks, which were trading at a sharp discount following a big sell-off in January. The iShares MSCI Emerging Market ETF, which tracks the widely-followed benchmark for emerging market stocks, is now in positive territory for the year.

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China and Emerging Markets: The Quiet Rebound

The first quarter of 2014 is almost in the books, and so far things have been a lot tougher in the markets than the previous two years. For example, year to date through March 25, the S&P 500 is up about 1.8%. Last year, the index was up nearly 6% through the first three months. In 2012, we already were up about 11%.  Yes, it’s been harder to make money this year, and that’s particularly true if you’ve been allocated to China and/or emerging markets. The charts here of the iShares China Large-Cap ETF (FXI) and the iShares MSCI Emerging Markets (EEM) show the respective tumble that took place in January, which was followed by a lot of volatility through mid-March.

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Getting Selective With Emerging Markets

Widely held emerging markets exchange traded funds have done nothing to convince wary investors this year will be better than the last.  The Vanguard FTSE Emerging Markets ETF and the iShares MSCI Emerging Markets ETF, the two largest emerging markets ETFs by assets, are both down more than 3% to start 2014. None of the four major BRIC single-country ETFs have posted gains in 2014. The major BRIC ETFs have been so bad to start the year that the WisdomTree India Earnings ETF is the best of the lot with a 2.2% loss. 

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