Emerging Market ETFs: Is It Too Late?

All eyes are on emerging markets shares and exchange traded funds (ETFs) now that many of these markets are trading at 52-week highs. But some wonder if we’re getting a little too exuberant about them.

It’s evident that the emerging market countries could very well be the engine of global growth for years to come.

• Ben Levisohn for BusinessWeek reports that year-to-date, we’re seeing some major numbers coming in from emerging markets. China (+84%), India (+64%) and Peru (+109%), to name a few, are trading at 52-week highs.
• Emerging markets now make up 50% of the world’s gross domestic product.
• The developing world is sitting proudly upon cash stockpiles, healthy banks and steady-to-moderate growth. Contrast this to the developed world, which is still working on reducing debt, saving banks and looking at slow-to-stunted growth.

Is it too late to get in? One analyst rightly points out that these markets won’t always go up, something investors need to keep in mind. For now, though, a clear uptrend seems to be in place. If emerging markets are an area to which you’d like exposure, be sure to watch the trend lines and have a stop loss in place in order to manage risk.

• iShares MSCI Emerging Markets (EEM): up 47.4% year-to-date

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