Stick with the best of the emerging markets

Article Excerpt

Many emerging markets have dropped lately. That’s because a growing U.S. economy and rising interest rates have pushed up the U.S. dollar. That typically results in capital flowing to the U.S. from emerging markets and pushing down investment in those economies. U.S. tariffs just add to the uncertainty. Even so, the best emerging markets—countries with manageable deficits and home to firms with sound fundamentals—still offer diversification and the potential for above-average returns. ISHARES INDIA 50 ETF $35.05 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com) tracks the Nifty 50 index—the 50 largest, most liquid Indian securities. It began trading in November 2009. The fund’s top holdings are HDFC Bank, 8.4%; Reliance Industries (conglomerate), 8.1%; Housing Development Finance, 7.2%; Infosys (information technology), 6.1%; ITC (conglomerate), 5.4%; Tata Consultancy (information technology), 4.7%, Kotak Mahindra Bank, 4.3%; and ICICI Bank, 4.1%. The fund has a high 0.93% expense ratio. Along with most emerging markets, this ETF’s unit price has dropped from the all-time high of $39.29 reached in…

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