Two Reasons To Invest In Emerging Market Stocks

Investing in emerging market equities offers many benefits. Two of the key reasons to invest in them are diversification benefits and higher returns.

1.Diversification Benefits:

The diversification benefits of owning emerging stocks is significant. Equity markets of developing countries have low co-relation to developed countries. The chart below shows the real benefits of emerging stocks.

Click to enlarge


2.Higher Returns:

Emerging stocks have offered higher returns than developed markets as shown in the chart below.



Source: Rally in Emerging Market Equities Peaking, or Just Beginning?, Thornburg Investment Management

Related ETFs:

  • iShares MSCI Emerging Markets ETF (EEM)
  • Vanguard MSCI Emerging Markets ETF (VWO)

Disclosure: No Positions

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