10 Best Emerging Market ETFs for Global Growth

The global economy is expected to rebound sharply this year and next. These are the best emerging market ETFs to leverage this potential source of growth.

global stock market concept
(Image credit: Getty Images)

There's no denying it's been a rough stretch for emerging market (EM) stocks.

Following a year in which COVID-19 caused the global economy to collapse, EM stocks – and by proxy emerging market ETFs – have more recently been hit by regulatory concerns out of China.

But investors would be wise to not leave emerging market stocks for dead. In fact, the International Monetary Fund (IMF) estimates the global economy will grow 6% this year and 4.9% the next. And EMs as a whole are projected to see 6.3% economic growth in 2021 and 5.2% in 2022 – compared to expectations for growth in advanced economies of 5.6% and 4.4%, respectively.

Plus, according to a report from Touchstone Research (opens in new tab), emerging market stocks look attractive right now relative to their U.S. counterparts. Specifically, the price-to-trailing-10-year earnings for the MSCI Emerging Market Index was at 18x at the end of May, compared to 36x for the S&P 500 Index.

And for those worried about volatility associated with investing in overseas stocks, one way to protect portfolios is to take a broad approach. Emerging market ETFs provide diversification by spreading out risk across a basket of stocks and number of countries, thereby mitigating some of the uncertainty that can come with investing in less-developed markets.

Here are 10 of the best emerging market ETFs to gain exposure to a global economic bounce. While most American investors likely have a home-country bias, these exchange-traded funds will ensure you don't miss out on diversification and potential growth in emerging markets, as well.

Data is as of Aug. 3. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds.

Will Ashworth
Contributing Writer, Kiplinger.com

Will has written professionally for investment and finance publications in both the U.S. and Canada since 2004. A native of Toronto, Canada, his sole objective is to help people become better and more informed investors. Fascinated by how companies make money, he's a keen student of business history. Married and now living in Halifax, Nova Scotia, he's also got an interest in equity and debt crowdfunding.