Investors are still flocking to the emerging markets in search of returns, but there has been a lot of commentary recently debating whether a bubble is forming in the region. Certain asset classes and sectors, like consumer stocks and property, have been dubbed relatively ‘pricey', while others have warned China could see a surge in inflation.
These issues highlight investors should not just blindly pile into the increasingly popular emerging markets in the belief that they cannot be burned and returns will come flooding in. ETF investors need to do their research and consider the types of fund available, along with the exposure they provide to the region. Cap-weighted indices can be dominated by a few of the largest stocks in certain countries, meaning exposure is less diversified than investing in an index might suggest. This has led to greater demand for new ways of gaining access to the region, which Helen Fowler looks at in...
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