An Emerging Markets ETF Portfolio for Bears

Emerging markets have made great strides in the last decade as a viable option for investment.

Neveretheless, despite more prudent economic policies, improved corporate governance and lower debt levels, the asset class remains susceptible to political risk, market manipulation, and limits on foreign investment. In addition, emerging market risks tend to become magnified in market downturns.

For investors fearful of a global recession and its ill effects on emerging markets, ProShares Short MSCI Emerging Market allows you to bet broadly against developing world stocks.

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Some bears believe the spread of the eurozone debt crisis to neighboring parts of Europe will hold back the economies of countries such as Hungary and Poland.

Since exchange traded fundstrade like stocks, you can short sell them to benefit from price declines.

ShortingSPDR S&P Emerging Europeis a way to profit from mediocre growth prospects in the region.

Should China fail to engineer a soft landing for its economy, its voracious appetite for raw materials could decline and pull down the fortunes of South American exporters like Brazil and Peru.

Likewise, slowing global demand for finished goods like smart phones and flat panel TVs could shake the health of producer nations like Taiwan.

Shorting ETFs that target these countries and regions are another tactic for EM bears.


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Earnings Central

  • FedEx reported a 24 percent rise in profit as the delivery company benefited from higher volumes in both its express and ground businesses.

  • A Sony Xperia Z2 smartphone and compatible devices, manufactured by Sony Corp, are displayed for sale inside a Bouygues Telecom store, operated by Bouygues SA in Paris, France, on Thursday, July 3, 2014.

    Sony warned of a much-deeper-than-expected loss and said it would not pay a dividend this year after it was hit by a $1.7 billion impairment charge.

  • Pedestrians walk past a RadioShack store in San Francisco.

    RadioShack reported its tenth straight quarterly loss and said it was in advanced talks with a number of parties to raise capital.