Emerging Markets ETF Products

Over the past few years it's become increasingly obvious that the only real source of economic growth in the world is the countries that make up The Emerging Markets. The primary countries that investors have been focused on are the BRIC countries: Brazil, Russia, India and China however there are several other countries that have been exhibiting similar characteristics as well. On this site we will take you through some of the various investment options and how they have performed relative to each other and the benchmark S&P 500.

EEM - iShares Emerging Markets ETF is the original Emerging Markets ETF and is by far the most actively traded of the diversified funds. EEM recently was surpassed in size by Vanguard's VWO probably due to the lower fee structure but EEM is still the most actively traded.

It is designed to provide investment results that correspond generally to the price and yield performance of the MSCI Emerging Markets index less fees. and expenses It began trading on April 7, 2003 and has out-performed the S&P 500 by a very wide margin since it's debut.

Gross Annual Expense Ratio = .69% (69 Basis Points) - Recently lowered from 72 basis points.

As you can see EEM Emerging Markets ETF has out-performed the S&P 500 by about 250 basis points since inception. You can also see that during the downturn the EEM fell much harder than the S&P 500, the returns are much more volatile in the emerging markets.

Performance Of EEM Since Inception VS. the S&P 500

Chart begins on the first trading day of EEM - 4/7/2003

VWO - Vanguard Emerging Markets ETF seeks to seeks to track the performance of the MSCI Emerging Markets index which is the same benchmark used by EEM.  VWO began trading on March 4, 2005 about 2 years after EEM so it still is not as large or actively traded but is nonetheless a VERY successful ETF.

Annual Expense Ratio = .27% (27 Basis Points) which is much lower than EEM.

VWO began trading 3/7/2005 and recently became the largest Emerging Markets ETF based on Net Assets.

As you can see by the chart below the performance of VWO since inception has been almost identical to the performance of EEM since they both target the same Emerging Markets Index.

VWO Performance Since Inception VS EEM

Chart begins on first trading day of VWO 3/7/2005

ADRE - BLDRS Emerging Markets 50 ADR Index is actually the oldest Emerging Markets ETF which began trading Nov 13, 2002. It seeks to provide investment results that correspond generally, before fees and expenses, to the price and yield performance of the Bank of New York Emerging Markets 50 ADR index.

The Annual Expense Ratio = .30% (30 Basis Points)

Recently ADRE had net assets of $635 Million and average daily trading volume of 65,000 shares so it's also a liquid ETF product.

Historically ADRE has generally just slightly under-performed EEM as you can see by the chart below. However, all 3 Emerging Markets ETFs have pretty much the same performance characteristics with little deviation.

ADRE Performance Since 4/7/2003 VS EEM

Chart is from 4/7/2003 the first trading day of EEM since ADRE is older than EEM.