“Last week, I listed concerns of a stock market correction in the U.S., including high valuations and a weaker-than-expected economy. Investors seemed to acknowledge those risks, as stocks drifted steadily lower on the week.
At the same time, European equities had a shock as the solvency of a major Portuguese bank was called into question. Shades of the 2011 European debt crisis spooked investors, and stocks across Europe slid.
With trouble in developed markets and yields on interest-bearing assets still paltry — and perhaps threatening to drift even lower given recent trends with the 10-year Treasury — then where is an investor to turn?
I say go global — and start staking out a position in emerging markets. The valuations are much cheaper, the momentum is much better and there are some very attractive ETFs that allow you to play the upside potential in these volatile regions but with enough diversification to reduce your risk significantly.
Here are three such emerging market ETFs I’m watching now:
iShares MSCI Taiwan Index ETFEWT -0.31%
• 60-day return: 11%
• 2014 return: 13%
• Net assets: $3.3 billion
• Expense ratio: 0.62%, or $62 on every $10,000 invested
Many emerging market stocks and ETFs have picked up nicely since their May lows, outperforming the S&P 500 in that period. But one region that has actually outperformed all year long is Taiwan…..”
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