ETF Expert Eyes Emerging Markets

12/15/2016 10:00 am EST

Focus: ETFs

Doug Fabian

Editor, Successful ETF Investing, ETF Trader's Edge, Weekly ETF Report, and ETFU.com

International and emerging market stocks were largely left out of the Trump rally in the weeks following the election, asserts fund expert Doug Fabian, editor of Successful ETF Investing.

A higher U.S. dollar and fears over trade wars sent investors out of those markets and into stocks here at home. Now, however, I suspect that the time is right to get back into this sector in our portfolios.

In our Income Portfolio, we are buying the WisdomTree Emerging Markets High Dividend Fund (DEM) with a 10% allocation.

This ETF seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Emerging Markets High Dividend Index.

That index is comprised of the best emerging market dividend stocks in the market today.

Those stocks currently generate a 3.69% annual yield, which makes DEM a perfect fit for income seekers.

We are also addition a 20% allocation to the Vanguard FTSE Emerging Markets ETF (VWO) in our Growth Portfolio.

This ETF is one of the best ways to get exposure to the broad emerging market segment. It’s also a very low cost way, with an expense ratio of just 0.15%.

The fund is pegged to the FTSE Emerging Markets All Cap China A Inclusion Index, which basically means the very best emerging market sector companies (excluding China’s A-share market).

In our Aggressive Portfolio, we are recommending purchase of the VanEck Vectors India Small-Cap Index ETF (SCIF).

This is a country-specific fund pegged to the fortunes of the India stock market. And because of its small-cap stock focus, it concentrates on India’s best domestic companies.

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By Doug Fabian, Editor of Successful ETF Investing

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