Buying Emerging Markets
I've been noticing over the past few years (as many others also have noticed) that China, India, and other emerging markets have been growing quickly. Anyways, recently I have finally decided to take action and expand my investments to these emerging markets.
DISCLAIMER: I am not a financial professional, so do your own research. I own the investments mentioned in this article as of this writing, and plan to buy more in the future, but may also to sell them in the future at an unspecified time. Investing in emerging markets is especially risky and you should do so with extreme caution.
There are two basic approaches I see to benefitting from emerging markets. First, invest in companies that are in those emerging markets, and second, invest in companies that would be affected by emerging markets (in particular, emerging markets will have a large effect on raw materials and commodities as they grow industrially and build infrastructure). The podcast China: Stalking the World's Commodities discusses the long term trend in the growth of commodity prices and usage due to increasing demand from emerging markets such as China. It's worth listening to.
The best way to get exposure into a market is through an index fund. For investing in companies in emerging markets, I chose the BLDRS Emerging Markets Fund(ADRE) which is an index of 50 stocks in diversified emerging markets. It has a low expense ratio (0.3%) and is an ETF so can be traded just like a stock. At the time of this writing, the fund's top country holdings included Brazil (24.7%), Korea (15.4%), China (13.0%), Mexico (12.4%), Taiwan (10.7%), and India (7.0%). See the ADRE fact sheet for more information.
As for commodities, it's a bit harder for individuals to directly invest in commodities themselves (such as oil, natural gas, etc.), so I chose a mutual fund that invests in companies that own or are involved in the development or processing of natural resources, the T. Rowe Price New Era Fund (PRNEX). Although not exactly investing in commodities, this fund should benefit from rising demand for commodities.
DISCLAIMER: I am not a financial professional, so do your own research. I own the investments mentioned in this article as of this writing, and plan to buy more in the future, but may also to sell them in the future at an unspecified time. Investing in emerging markets is especially risky and you should do so with extreme caution.
There are two basic approaches I see to benefitting from emerging markets. First, invest in companies that are in those emerging markets, and second, invest in companies that would be affected by emerging markets (in particular, emerging markets will have a large effect on raw materials and commodities as they grow industrially and build infrastructure). The podcast China: Stalking the World's Commodities discusses the long term trend in the growth of commodity prices and usage due to increasing demand from emerging markets such as China. It's worth listening to.
The best way to get exposure into a market is through an index fund. For investing in companies in emerging markets, I chose the BLDRS Emerging Markets Fund(ADRE) which is an index of 50 stocks in diversified emerging markets. It has a low expense ratio (0.3%) and is an ETF so can be traded just like a stock. At the time of this writing, the fund's top country holdings included Brazil (24.7%), Korea (15.4%), China (13.0%), Mexico (12.4%), Taiwan (10.7%), and India (7.0%). See the ADRE fact sheet for more information.
As for commodities, it's a bit harder for individuals to directly invest in commodities themselves (such as oil, natural gas, etc.), so I chose a mutual fund that invests in companies that own or are involved in the development or processing of natural resources, the T. Rowe Price New Era Fund (PRNEX). Although not exactly investing in commodities, this fund should benefit from rising demand for commodities.
posted by jasonz at
3:59 PM
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