EFTs offer ways to invest in emerging markets A: Investors couldn't find an emerging market they didn't want to buy into in 2007. But now that stocks in these countries are down, investors are steering clear.
Investors willing to take on the risk of emerging markets stocks may find some
interesting values. And there are many ways to quickly and cost-effectively
build portfolios of stocks of companies in these countries.
The easiest choice is to buy a low-cost exchange traded fund that owns stocks of
all those countries. Vanguard, for instance, offers the Vanguard FTSE Emerging
Markets ETF. That ETF puts 19% of its holdings in China, 14% in Brazil, 8% in
India and 12% in South Korea. The ETF's expense ratio is very low relative to
many peers, at 0.18%, well below the 1.6% average charged by similar funds.
Another option would be to buy ETFs that are focused on those individual
countries. But managing this portfolio will be more complex and the fees higher.
iShares offers the iShares FTSE China ETF, for instance, which is more
concentrated. For instance, 11% of the fund is invested in one Chinese company,
China Mobile. The fee is much higher, though, at 0.72%.
