Emerging Markets Funds

Emerging markets change often Defining the countries which are considered 'emerging' is a moving target. It's a matter of interpretation because determining whether a country is emerging or has emerged is subjective. Morgan Stanley Capital International (MCSI) lists the countries as being 25 country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand and Turkey.

I recommend:  Information broken down by region is available at EmergingMarkets.org, offering specific information about each area. The updated list of countries can be found through MCSI.

Choose the right emerging markets funds Funds are typically made up based on an index or multiple indices. There is an index based on all of the major companies in Eastern Europe, for example. Specific mutual funds or exchange traded funds (ETF) can be traded, so the investor owns a very small stake in all of the companies in that fund. iShares, for example, sells a fund under the ticker-symbol EFA, an index of the growing companies in the MSCI list of Eastern European countries.

I recommend:  Forbes keeps an updated list of global indicies on its website for easy access and information. It's a good place to find emerging markets mutual funds comparison information. iShares offers several lines of ETFs which include emerging market funds.

Stay up to date about top emerging markets funds Emerging markets mutual funds are risky investments because the economic and political landscape in some countries can shift quickly. A political revolt somewhere in Africa can dramatically impact the price of emerging market funds weighted heavily in African equities. Likewise, Eastern Europe funds or Asian funds can be politically impacted by instability of a major company in those areas. To invest in an emerging markets growth fund, one must become a large-scale consumer of international news.

I recommend:  Firms such as Fidelity allow you to open a free account and offer reasonable fees for trading. In the online environment, you can set up "watch lists" of your funds to keep track of each time you log in. This is an easy way to track your mutual funds for emerging markets.