Emerging markets ETFs and index funds are high risk, high reward investments. They certainly haven’t been kind to investors lately. But it doesn’t have to be, if you understand the risks. While most are thinking its time to cut and run, it might be a reason to buy.
There are three ways to invest in emerging markets: buy stock in a local company doing business overseas, you can buy a foreign company through its ADR or American Depositary Receipt, or you can buy a diversified emerging markets ETF or index fund.
What Are Emerging Markets
You won’t find developed countries in these funds. Rather, emerging market economies are going through major industrial growth. Think of it as their own Industrial Revolution. New businesses are growing, infrastructure is being built, education levels are rising, and these countries are in the process of growing a middle class that brings higher wages and discretionary spending. Continue Reading…