Tag: Vanguard FTSE Emerging Markets ETF (VWO)

Your ETFs Are At Risk If US Delist Chinese Stocks

Posted on by Matt Thalman

At the beginning of January, the drama of delisting certain Chinese stocks controlled the headlines for a few days. Then, as we all know, other more newsworthy stories occurred, and we all forgot about the delisting of Chinese stocks due to 'national security' concerns.

Several different stocks were being thrown around as possibly being delisted in the future, which could affect you even if you don't own any individual Chinese stocks or Chinese-focused ETFs.

The delisting occurred as a way to 'protect' the national security of the United States against China. So, the main focus of the delisted stocks were those of military importance to the Chinese government. Most of the stocks on this list the average investors would have never heard of before. But, there were three telecommunications companies thrown on the list that some investors may have heard of. However, still very unlikely you would be holding them individually or through a non-Chinese-focused ETF.

However, two Chinese stocks, in particular, are a part of a vast number of popular ETFs in the US. The companies are JD.com (JD) and Alibaba Group Holding (BABA). For whatever reason, these two stocks were and still to an extent being considered as possible additions to the delisting list. Continue reading "Your ETFs Are At Risk If US Delist Chinese Stocks" →

Emerging Market ETFs Could Offer Great Opportunities

Posted on by Matt Thalman

Recent studies of emerging markets show their investment opportunities may be greater than most investors realize. One study believes that by 2020 the aggregate GDP of emerging markets will overtake that of developed economies around the world. Another one has the number of global consumers hitting 1.8 billion by 2025, with the majority of them living in emerging markets. Lastly, it is believed consumer spending in emerging markets will grow three times faster than that of developed markets in the coming years.

All three of these stats indicate there could soon be a huge growth opportunity in developing markets around the world. But there are a lot of emerging market ETFs that are down more than 9% year-to-date while the SPDR S&P 500 ETF (SPY) is up more than 10% and hitting new all-time highs. With that being said, many experts are beginning to grow weary of U.S. equities as we have now set a new record regarding the length of our current bull-market and valuations appear to be stretched.

When we take all of this into consideration, moving money to emerging market funds now may turn out to be a good long-term asset allocation play. So, let's take a look at a few funds which look appealing due to their rough 2018.

The first two are the Vanguard FTSE Emerging Markets ETF (VWO) and its direct competitor the Schwab Emerging Markets Equity ETF (SCHE). Both of these funds are large, liquid and have low fee’s; 0.14% and 0.13% respectively. They also both don’t consider South Korea an emerging market but hold positions based in Hong Kong, Taiwan, India, China, South Africa, Brazil, Russia, and Mexico to name the top 8 countries based on holdings. Both have an index weighting based on market cap and have a weighted market cap of around $80 billion, meaning you’re getting great foreign large-cap exposure. Continue reading "Emerging Market ETFs Could Offer Great Opportunities" →