For equity investors, choices abound between broad emerging market portfolios, BRIC-focused (Brazil, Russia, India, China) plays or even single-country ETFs.
To Vanneman, a broader basket is a better way to go, although he notes BRICs are attractive.
“In general, I tend to prefer the broader approach, but the BRIC ETFs do have better expected returns at present,” he said. “While there is strong overlap in the top holdings, there are differences in sectors, regional exposures and market-cap breakdown. On balance, the BRIC ETFs have become more attractive, including due to greater emphasis on emerging Asia and Latin America.”
Some of the largest broad market EM ETFs and BRIC total market ETFs include:
- iShares MSCI Emerging Markets ETF (EEM), with $26 billion in AUM. It costs 0.69% in ER.
- Vanguard FTSE Emerging Markets ETF (VWO), with $43.3 billion in AUM. It costs 0.15%.
- iShares Core MSCI Emerging Markets ETF (IEMG), with $17.4 billion in AUM. It costs 0.14%.
- Schwab Emerging Markets Equity ETF (SCHE), with $2.2 billion in AUM. It costs 0.13%.
- iShares MSCI BRIC ETF (BKF), with $150 million in assets. It costs 0.69%.
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Contact Cinthia Murphy at [email protected]
