Select ETFs: Emerging Markets Equities

The term “emerging equities” refers to the listed shares of companies based in emerging-market countries, such as China, Brazil and South Africa.. In general, emerging-market countries are regarded as having rapidly growing economies that show greater potential returns but higher risk than developed markets.

It should be noted that those with short time horizons tend to gravitate toward EEM, which has a deep and active options market and generally experiences higher trading volumes, while VWO tends to attract longer-term investors.

Best for Trading

iShares MSCI Emerging Markets ETF (EEM)

Expense Ratio: 0.68%

The iShares MSCI Emerging Markets ETF seeks to track the investment results of an index composed of large- and mid-capitalization emerging market equities. EEM is one of the most popular ETFs in the world, and is one of the oldest products on the market offering exposure to stock markets of emerging economies.

Best for Holding

Vanguard FTSE Emerging Markets ETF (VWO)

Expense Ratio: 0.08%

VWO is one of the largest ETFs in the world, having been embraced by investors as an efficient way to establish exposure to emerging markets. Given the opportunity to establish broad-based exposure to the developing economies of the world, this fund can be used as a short-term trading vehicle or as a core holding in a long-term, buy-and-hold portfolio.

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