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ETF Specialist

A Smoother (But Still Bumpy) Emerging Markets Ride

Low-volatility emerging-markets ETF can reduce risk and still provide diversification benefits investors seek.

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Emerging markets were in the midst of an impressive rally leading up to the U.S. presidential election, partially because of strengthening currencies and diminishing worries about China. From January 2016 through October 2016, the MSCI Emerging Markets Index had outperformed the S&P 500 and MSCI EAFE Index, which tracks foreign developed markets in Europe, Asia, and Australia, by 13.59 and 16.65 percentage points, respectively. Investors were quick to take notice. Through the first 10 months of the year, funds in the diversified emerging-markets Morningstar Category attracted more than $22 billion in net new inflows.

Matthew Diamond does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.