Top Emerging Markets ETFs

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South Korea's Status

Over the past year, the equal-weighting strategy has lagged VWO by more than 4 percentage points. Meanwhile the currency-hedged portfolio of DBEM outperformed both strategies.

This may come as little consolation as DBEM's outperformance meant a 10 percent loss, but when faced with the choice of losing less or losing more, investors will always choose the former.

Last year removing the currency from the equation mitigated losses.

But making a single foreign-currency call, let alone making a multiple-currency call in the case of a multi-country emerging markets ETF, may be a bridge too far for most investors.

DBEM is a very straightforward way of altering the exposure offered by VWO and EEM, but some investors may be choosing the theme with the goal of getting exposure to the local currencies with the hope they will rise against the dollar along with the fortunes of their citizens.

That makes VWO and EEM the right choice for investors unwilling to try one of the many nuanced strategies floating around the industry --whether they be low volatility, alpha seeking, or high beta.

After all, those funds may end up being the right choice moving forward, but since so many of them are new, it's hard to compare their historic performance against more established funds.

For investors that means market-cap weighted funds or bust -- and add a side of South Korea.

I know my colleagues Dennis and Ana have recently blogged thoughtfully about moving beyond VWO and EEM, but what I'm saying is don't go fixing something that ain't broke.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: EEM , EWEM , GMM , SCHE , VWO

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