As the global economy continues to evolve, investors are seeking opportunities beyond traditional markets to diversify their portfolios and achieve higher returns. Emerging markets ETF have emerged as a compelling option for Canadian investors. In fact, many investors are looking to tap into the growth potential of economies that are rapidly developing and expanding. One effective way to gain exposure is through Exchange-Traded Funds (ETFs) that focus on emerging markets.
Emerging markets encompass a diverse range of countries, including nations in Asia, Latin America, Africa, and the Middle East. These economies often exhibit higher growth rates compared to developed markets, driven by factors such as population growth and increasing consumer demand.
For Canadian investors, Emerging Markets ETFs provide an accessible and efficient avenue to participate in these growth stories. These ETFs are designed to track a basket of stocks or bonds from companies within emerging markets. By investing in an ETF, Canadian investors can mitigate some of the risks associated with investing in individual companies.
Best Emerging Markets ETF – Top 3 in Canada
Asset under management and inception date
Performance comparison
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Vanguard FTSE Emerging Markets All Cap Index ETF (VEE)
The Vanguard FTSE Emerging Markets All Cap Index ETF aims to replicate the results of the FTSE Emerging Markets All Cap China A Inclusion Index. Its investments are primarily in the stocks of large, mid-sized, and small companies situated within emerging markets.
iShares Core MSCI Emerging Markets IMI Index ETF (XEC)
XEC presents a clear investment objective: to secure long-term capital growth by mirroring the performance of the MSCI Emerging Markets Investable Market Index, net of expenses. This strategic approach serves as the foundation for several persuasive factors that make XEC an attractive consideration for investors.
Firstly, XEC offers Strategic Access to the promising long-term growth potential synonymous with emerging markets. Through this fund, investors can align their portfolios with the upward trajectory of economies on the rise.
Secondly, Cost-Effective Diversification is a key advantage that XEC brings to the table. With a straightforward and economical approach, investors gain ownership of a well-rounded collection of over 1500 stocks worldwide. This diversification can mitigate risk and amplify growth potential.
Furthermore, XEC is thoughtfully designed as a Core Holding for the long haul. Its structure is intended to act as a stable and fundamental element within investment portfolios, serving as an anchor amidst market fluctuations.
BMO MSCI Emerging Markets Index ETF (TSE:ZEM)
The main goal of the BMO MSCI Emerging Markets Index ETF is to mirror the performance of the MSCI Emerging Markets Index. The MSCI Emerging Markets Index itself reflects the combined performance of both large and mid-sized companies across 24 countries categorized as Emerging Markets. These markets countries consist of a diverse range including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey, and the United Arab Emirates.
With a substantial composition of 1,422 individual elements, this index effectively encompasses approximately 85% of the market capitalization that is freely traded and adjusted within each of these countries.
