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Emerging Market ETFs That Go Against the Grain


Many investors and advisors remain cautious on the emerging markets because of perceived risks, such as the housing bubble in China and the drug war in Mexico, but some exchange traded funds that track these emerging markets are painting a different picture.

Prominent hedge fund manager, James Chanos, president and founder of Kynikos Associates, an investment firm known for its short selling, has warned that China is in a property bubble that could mirror the U.S. meltdown, writes Gary Gordon for TheStreet.

However, the Guggenheim China Real Estate Fund (TAO) , which tracks real estate investment trusts that generate revenue from real estate development, management and/or ownership of property in China, Hong Kong and Macau, has gained 37.1% year-to-date and is hovering around its 52-week high.

Guggenheim China Real Estate Fund

In Mexico, the border towns have been ravaged by drug cartel violence and real estate activity has also stagnated after the 2008 collapse.

Nevertheless, Gordon believes Mexico could overtake Brazil as the country’s heavy emphasis on trade with the U.S. will generate returns, especially in light of increasingly loose U.S. monetary policies and quantitative easing plans.

The iShares MSCI Mexico Investable Market Index Fund (EWW) has gained 23.1% year-to-date and is sitting above its 50-day and 200-day moving averages.

iShares MSCI Mexico

For more information on the emerging markets, visit our emerging markets category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.