The World Economy Is Picking Up and This Emerging Markets ETF Could Gain Along With It

The International Monetary Fund raised its global growth forecast on Tuesday as the world economy has begun to show renewed strength. World trade was slated to grow 4.2% which was the most since 2011.

The Vanguard FTSE Emerging Markets All Cap Index (TSX:VEE) invests in stock of companies in emerging markets, including countries like China, Brazil, South Africa, and others. Shares of the index have increased 15.9% in 2017 and 10% year over year. Stocks in emerging markets are now reaching close to 3-year highs on the weaker U.S. dollar, the strength of the yuan, and the aforementioned global growth.

However, there are concerns after Turkey and the United States halted non-immigrant visas after the arrest of a U.S. consular employee. The Turkish government has been moving to expand trade with the West in recent years, but has experienced a spat of difficult relations following the attempted 2016 coup which was successfully crushed by President Erdogan.

The IMF also raised growth projections for China up to 6.8% for the year. However, the forecast for India did experience a marginal decline. The IMF did warn of a possible slowdown in China due to high debt levels. Since 2008 its debt as a percentage of GDP has increased by 10% annually.

In any case, this ETF offers solid short and medium term growth for investors concerned that North American or European indexes could face a cooldown with monetary policy tightening.