Despite higher economic growth rates, emerging markets have
lagged developed markets and the U.S. this year and last year.
They've returned 5.57% year to date, while losing 0.25% the past
12 months. Developed markets rose 7.60% and 5.33% over those
periods. The S&P 500 returned 13.77% this year and 22.56% the
past 12 months.
But some corners of the developing world have reigned over all
foreign market this year. Here's an overview of ETFs tracking the
five biggest foreign gainers this year in order of
Market Vectors Egypt Index ETF (
After cratering 52% following the revolution last year, the
world's No. 1 performing country rallied an eye-popping 46.72%
year to date and 10.52% the past 12 months. The Middle Eastern
come-back story has formally asked the International Monetary
Fund for a $4.8 billion loan to rescue its economy. Should the
deal fall apart though, the market could come crashing down,
market watchers say. Investing in Egypt is highly speculative
because it would still need more money and the uprisings have
damaged the tourism industry, said Stuart Quint, international
strategist at Brinker Capital in Berwyn, Pa.
iSharesMSCI Turkey Investable Market Index (
: Up 37.38% year to date and 19.85% in one year.
"Turkey is becoming a favorite emerging market again as growth
has been exceeding expectations and inflation is trending
downward," said Brad Durham of EPFR Global. His data show that
4.3% of assets flowing into equity country funds this year
traveled to Turkey -- the third most popular destination this
year behind the Philippines and Thailand.
The country revved up auto manufacturing as Detroit hit a
wall. Its lira currency has spared it from the eurozone crisis
and hasn't needed IMF support. Foreign direct investments from
both U.S. and European multinationals flow freely into the
country thanks to its liberal investing climate.
"With its fully functioning democracy and economic
opportunities abounding, Turkey is a shining light on the hill
for regional economies looking to bolster their middle class and
foster democracy," said Ted Cominos, a private equity partner at
Boston-based Edwards Wildman. He has consulted on a handful of
venture capital and acquisition deals in the country.
iSharesMSCI Philippines Investable Market Index (
: Up 21.92% year to date and 18.06% in 12 months.
Eight typhoons this year have drawn foreign aid, and
rebuilding efforts should spur infrastructure spending. The
archipelago attracted 5% of assets flowing into foreign funds
this year, according EPFR.
"The peso has been appreciating and investor flows into the
country have been favorable, causing the nation's foreign
reserves to climb to a record $79 billion," said EPFR's
iSharesMSCI Thailand Investable Market Index (
Up 20.68% year to date and 13.85% the past 12 months.
"Following the Chinese model, Thailand is very pro-business
and has developed infrastructure to make doing business within
its borders easier, allowing it to maintain a very competitive
edge over its regional peers," said Dawn Bennett, CEO of Bennett
Group Financial Services in Washington D.C. She expects Thailand
to continue outperforming this year.
iSharesMSCI Mexico Investable Market Index (
Thanks in part to the peso's 5% climb against the dollar this
year, it's added 16.43% year to date and 13.91% the past 12
Mexico will soon replace China as the premier global
manufacturer for shipments to North and South America, said Carl
Delfeld, founder of PacificRimConfidential.com.
"American, European, Japanese, South Korean and, yes, even
China are falling over each other to invest in Mexican production
facilities," he said. "Eighty percent of Mexico's exports are
manufactured goods and trade now represents 60% of GDP."