One of BusinessWeek magazine’s investing themes for 2005 is emerging markets, specifically the BRIC countries: Brazil, Russia, India and China. Though there are closed-end funds or index funds that track individual countries, I don’t want to risk investing in a specific emerging market. One way for me to gain broad exposure to emerging markets is the iShares MSCI Emerging Markets Index Fund (EEM). EEM has about 27% exposure to BRIC countries, but the expense ratio is only 0.75%.
I am aiming for an allocation of 10% of my portfolio to emerging markets. This will provide me with added diversification while lowering volatility, since emerging markets have low correlation with others. However, emerging markets are extremely volatile, so I will probably be investing in them over a period of time.
Bookmark: del.icio.us Digg StumbleUpon
1 response so far ↓
1 jonathan@mymoneyblog.com // Aug 2, 2005 at 7:46 pm
Do you own EEM? I’m thinking about picking up some shares, but it’s been having a pretty good run the last few years.
Leave a Comment