Published On: Fri, Dec 20th, 2013

What Factors Support Investing In iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM)?

Dallas, Texas 12/20/2013 (FINANCIALSTRENDS) – If we talk about the largest emerging funds then there are two names that cannot be ignored and those are iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) and VWO. The main reason behind all this positive sentiment is their share of liquidity which is at all time high. As per many industry analysts these funds are also part of speculation and short-term holdings and people are actually making good amount of money from them.

The only problem with such funds is that these cannot be trusted for long-term and the main reason behind this is that these funds are mostly concerned with emerging markets like China, India and Brazil. The performance of these funds depends upon the country’s government. Moreover the companies that are associated are mostly government control companies.

Do we see reemergence of the emerging markets?

Since last summer the stocks that are associated with emerging markets have given around 9% return which is considered as pretty decent. This is the reason many investment firms and trading houses who have given iShares MSCI Emerging Markets Indx (ETF) (NYSEARCA:EEM) and VWO an outperform rating. But despite all these positive ratings there are few headwinds that still remain such as slowing growth in India and China and the uncertainty about the emerging markets overall performance.

Does that mean we should stay back and just adopt wait and watch strategy? No, because as per some professionals and renowned stock market operators it is good if we enter into these markets with a cautious approach and make some short-term money.  One more important point that you should keep in mind is to be prepared for the volatility. If we pay attention to the current and upcoming corporate governance then also we can make our decision. But if you are not facing any cash crunch problem then stay invested for long term and sees the reemergence of the emerging markets in the times to come.

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