Emerging markets, which contribute around 15 percent of the world's market value, are at higher risk because they are often located in smaller economies with less infrastructure and legal and regulatory oversight. They also tend to have many state-controlled companies, in countries such as Russia and China.
iShares MSCI Emerging Markets E.T.F. achieved 17.7 for 2019, with top holdings including Alibaba, Taiwan Semiconductor, Tencent, Samsung and China Construction Bank. Its expenses are 0.67 percent.
Invesco's FTSE RAFI Emerging Markets E.T.F. was up 16.2 percent for 2019, with top holdings including Taiwan Semiconductor, China Construction Bank, Lukoil and Gazprom. Spending is 0.5 per cent.
People who want to stick to developed economies can look at the Vanguard FTSE Developed Markets ETF, which focuses on major companies in cycle, finance and industry. It was up 22 percent for 2019 with a cost of 0.05 percent.
SPDR Portfolio Developed World ex-US E.T.F., tracking the S&P Developed ex-U.S. The BMI index is a bit more weighted to the economy and industry. This was up 22.3 per cent for the year with expenses of 0.04 per cent. And Schwab International Equity E.T.F., which also focuses on larger companies, gained 20.9 percent for 2019 with expenses of 0.06 percent.
A final strategy involves E.T.F.s focusing on stable companies that pay dividends. But there are many possible approaches, including funds that focus on developed markets versus those that are tilted toward emerging markets. The turnover in these different portfolios can be high, warns Sotiroff of Morningstar, so trading costs are higher.
Cambria Emerging Shareholder Yield E.T.F. tracks a Cambria index that follows stocks with big payouts. It was up 21.8 percent for 2019, with top holders Iteq, TransContainer and Zhen Ding Technology Holding. Vanguard holds International High Dividend Yield E.T.F., which gained 18.3 percent for 2019, with top holders Taiwan Semiconductor, Toyota, HSBC and Royal Dutch Shell.