Stock Market

Vanguard Emerging Market Stock Index – The 5 Best Emerging Markets ETFs (1 From Vanguard)

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Vanguard Emerging Market Stock Index – Highest Rated?

Emerging Markets refer to nations that are growing and becoming more engaged in the global economy. They are a crucial piece in any globally diversified investment portfolio. In this video we’ll look at the best Emerging Markets ETFs to get in on this corner of the market.

// TIMESTAMPS:

00:00 – Intro
00:29 – Why Emerging Markets?
01:43 – Emerging Markets vs. Developed Markets
02:21 – VWO
02:47 – IEMG
03:12 – EEM
03:30 – SCHE
03:52 – SPEM
04:07 – My choice
04:25 – Where to buy these ETFs
04:48 – Disclosure
05:13 – Financial Disclaimer
05:44 – Outro

// PARTIAL TRANSCRIPT:

Emerging Markets are growing countries that are becoming more active in the global economy. As such, they have a lower income per capita than developed markets. The growth of these economies typically coincides with industrialization and an increased standard of living. Notable emerging market economies include Russia, Mexico, China, Egypt, Taiwan, India, and Brazil.

Emerging markets comprise about 10% of the global stock market and about 25% of the ex-US stock market. They have outpaced the larger international stock market historically. Arguably more importantly, emerging markets have a lower correlation to the U.S. stock market than international developed markets, offering a superior diversification benefit.

Obvious risks include political instability, currency devaluation, infrastructure issues, lack of liquidity, market inefficiency, and absence of free market forces. These risks diminish or disappear as emerging market economies grow. Countries can be upgraded or downgraded from classification as an emerging market at any time, based on factors like income levels, financial systems, and growth.

Think of emerging markets as having more room to grow versus developed markets, similar to small cap stocks relative to large cap stocks. Emerging markets have historically outperformed developed markets, albeit with much greater volatility and risk. Thankfully, returns from emerging markets stocks have compensated investors for this increased level of risk, with emerging markets still delivering higher risk-adjusted returns than developed markets historically.

More tools have emerged in recent years to efficiently access emerging markets as an investment. ETFs are the most popular way. Let’s look at the best emerging markets ETFs.

VWO – Vanguard FTSE Emerging Markets ETF
IEMG – iShares Core MSCI Emerging Markets ETF
EEM – iShares MSCI Emerging Markets ETF
SCHE – Schwab Emerging Markets Equity ETF
SPEM – SPDR Portfolio Emerging Markets ETF

I personally would probably go with VWO from Vanguard or IEMG from iShares. Remember that VWO excludes South Korea while IEMG includes it. IEMG has slightly outperformed VWO historically and has exhibited lower volatility.

Read the blog post here: https://www.optimizedportfolio.com/best-emerging-markets-etfs/

#investing #etfs #vanguard #stocks #stockmarket

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Thanks for watching the Vanguard Emerging Market Stock Index video!

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10 Comments

  1. Winston White
    July 29, 2021 at 3:54 pm

    Worth mentioning that there are other Emerging Markets ETFs that have higher dividends than the ones mentioned here, namely PXH and DEM. This may offset some of the risks you may be taking with increased exposure to volatility.

    Not financial advice.

  2. Chris T
    July 29, 2021 at 3:54 pm

    when you realize everything he read was wrd for wrd on google. lol. i was looking it up and found the articles he used to make this video. kind of happens when you start sounding like a robot instead of an investor

  3. Alpha Omega Redd
    July 29, 2021 at 3:54 pm

    Great video 👍👍👍

  4. Ife
    July 29, 2021 at 3:54 pm

    Why does IEMG shows up as IWDA on my broker? I'm using degiro

  5. joaoninguemforever
    July 29, 2021 at 3:54 pm

    VWO and FNDE, Which will you chose? Why? Why not EEM?

  6. Tom Settles
    July 29, 2021 at 3:54 pm

    Good video. I prefer SCHE because of better dividends, some screening and slightly better price performance as VWO.

  7. Jesse Michael
    July 29, 2021 at 3:54 pm

    Great video! Maybe you could do more videos delving further into these ETF's. I'd certainly watch those. I think Dalio put together the VWO ETF.

  8. Kevin Conroy
    July 29, 2021 at 3:54 pm

    Nice video, I’m doing more research on emerging markets ETFs already set up a pie on M1 finance with EEM, IEMG, ESGE, SCHE, ECON, SPEM and EWX

  9. Mohammed Sharif
    July 29, 2021 at 3:54 pm

    Very informative video. I agree with you in regard to VWO. Great job 👏👏👏. Keep it up🙏Thank you 🙏👍

  10. Tim Vattakavanich
    July 29, 2021 at 3:54 pm

    Wrong flag..