By The ETF Professor
With just a few days left before 2012's halfway point arrives, investors might feel disappointed with the performance of emerging markets ETFs year-to-date. Following a stellar start to 2012, emerging markets funds have wilted thanks to China's slowing economy and Europe's sovereign debt woes, among other catalysts.
Globalization’s impact on trade used to be relatively straightforward: developed countries outsourced production to low-wage economies in return for cheap goods. Yet as emerging economies develop a robust middle class and gain more access to digital technologies, cross-border exchanges between countries are becoming more complex. They’re also growing at a dizzying pace.
The ETF Professor
With 2013 finally here, reflecting back on the year that was for exchange-traded products can provide investors with some clues regarding what themes and trends will be hot this year. This is not a bold prediction, but it is reasonable to expect one of 2012's hottest asset classes to stand tall again in 2013.
By Tom Lydon:
Emerging markets and dividends in one exchange traded fund is a trend that is catching on with investors, and providers alike. The higher growth potential that emerging economies present, plus an income stream is a combination that is showing marked interest.
Last week John Derrick appeared on FOX Business to discuss the strong rebound in emerging markets so far in 2012 with Charles Payne. John explained that the global markets are currently in the early stages of a new easing cycle that began toward the end of 2011.
John said central bankers and government officials are focused on increasing economic activity through policies such as low interest rates and higher money supply growth rates.
By greg group: While the U.S. markets have been in an uptrend in early 2012, the emerging markets have been even hotter. The S&P 500 (SPY) is up 7% year to date, a nice return over 25 trading days ending February 6, 2012. Emerging market ETFs remain at attractive valuations after taking a beating over the course of 2011. But since the start of 2012, they've been advancing.