Legendary investor Jim Rogers is short equities and long precious metals and commodities, the wisdom of which is certainly reflected in the depressed price of the Vanguard MSCI Emerging Markets exchange-traded fund ( VWO , quote ).
But it is impossible to time markets. And as an article in Kiplingers Personal Finance by Michael Stratford, "The Cheap," notes, "Emerging economies are likely to grow faster than the U.S. and other established economies for years to come. As for 2011, the International Monetary Fund estimates that gross domestic proudct in the U.S. will grow by a tepid 2.5%, while it sees GDP in emerging markets climbing 6.6%, on average."
While the potential of emerging market stocks is manifest for "years to come" as Stratford states in Kiplingers Personal Finance , it has certainly not been a good year for the Vanguard MSCI Emerging Markets exchange traded fund (VWO). It is down almost 6% for the week, almost 10% for the month and almost 25% for 2011. The trend is not the friend, either, as it is trading well below its 20-day, 50-day, and 200-day moving averages.
Nothing in the Eurozone debt crisis would certainly dissaude anyone from looking to where the growth will be in emerging markets and investing likewise: witness the central bank of Germany having to buy its country's sovereign debt in the most recent auction. The largest components of the Vanguard MSCI Emerging Markets exchanged traded fund are China (18%), South Korea (15%), Brazil (14%) and Taiwan (11%). As is the trademark of an investment product from the Vanguard Group, the Vanguard MSCI Emerging Markets exchange traded fund (VOW) has a low annual expense ratio of just 0.22%. Stocks in emerging markets will rally and the Vanguard MSCI Emerging Markets exchange-traded fund provides broad exposure for that eventuality at a low price today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.