By the Numbers

Global Scorecard:  Emerging Markets Lead


Emerging markets took the performance lead during the second quarter of 2009, with stocks in India and Russia jumping over 40%, as global markets recovered from multi-year lows.

Signs of improving economic data encouraged investors to shift their focus to opportunities overseas during the second quarter. Reinforcing the view that emerging markets could lead a market rebound, Morgan's Stanley Capital International (MSCI) Emerging Markets Index, a benchmark of equity market performance in 22 emerging economies, rose 34% in the past three months.

Compared to the first quarter of 2009, BRIC markets (Brazil, Russia, India, and China), saw their benchmark indices post double digit gains. India and Russia, for example, posted gains north of 43%.  China is an example of a country that has had solid gains for each quarter so far in 2009, giving it the best performance amongst its peers YTD.  Some Latin American economies also saw big rallies.  The Argentine Merval index gained 41% and the Chilean IPSA rose 25%. 

Among developed economies, Japan posted a gain of 23%, ahead of the US and most European economies.  For investors, the questions remains whether recent gains in emerging markets are sustainable or a market reversal could be ahead. 

Global Scorecard

The following ETFs provide a sample of securities traded in the US with exposure to emerging markets.  Keep in mind that investing overseas widens the risks for investors as they now need to consider currency cross rates, political uncertainty and other factors.

  • IShares MSCI Emerging Markets Index Fund
  • Direxion Daily Emerging Markets Bull 3X
  • SPDR S&P Emerging Markets
  • PowerShares FTSE RAFI Emerging Markets Portfolio
  • Vanguard Emerging Markets
  • IShares S&P Latin America 40 Index Fund
  • SPDR S&P Emerging Latin America

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