Investors looking for growth often look to high-growth sectors, relying on momentum trades and long-term catalysts to carry their portfolio ever higher.
With the broader stock market becoming increasingly frothy, more conservative investors have looked for a way to gain low-cost exposure to long-term growth trends globally, in a bid for diversification.
One excellent ETF in this regard would be the Vanguard FTSE Emerging Markets ETF (VWO). This ETF broad portfolio of securities is market cap weighted, allowing for a near perfect diversification of idiosyncratic risk when assessing major emerging market companies as an entire sector.
This fund’s 0.14% expense ratio makes it one of the cheapest ways to gain such diversification in the emerging markets sector.
Despite having significant exposure to China, where a large percentage of the fund’s assets are based due to market capitalization and growth in the world’s second largest economy, broadly speaking this ETF has exposure to 22 emerging markets, making it one of the most comprehensive and best performing funds for the fee.
In terms of bang for one’s buck, this ETF certainly comes out near the top of the list.
Given the fact many of the companies covered by this ETF have valuation multiples which are lower than their North American or European counterparts, as well as growth profiles which many analysts believe are superior to their Western peers, adding this ETF to one’s portfolio for the long-haul should prove to be a very profitable trade.
Invest wisely, my friends.
