Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

3 Reasons Now May Be Time for Emerging Markets ETFs

BY | ETF Database
03/13/2025 | 369 VIEWS
Investors are reading a lot about market uncertainty right now, likely for a good reason. As potential tariffs and high valuations loom over portfolios, some may be considering other options. Diversification is one thing, but simple diversification may not cut it when facing high-risk, red-hot tech stocks. Rather than chase 2024’s performances, then, investors may want to look longer term to a real upside area. Emerging markets may finally be prepared for their moment in the sun, with emerging markets ETFs offering options therein.See more: 6 ETFs to Enhance Your Equity Portfolio Yes, U.S. firms and equities remain a core component of investor portfolios. Emerging markets ETFs, however, can provide satellite exposures that augment that core allocation and provide diversification. Long term, emerging markets ETFs can play that important satellite role and outperform other satellite candidates.Dollar to Drop?Should the U.S. dollar drop in value this year, that may benefit emerging markets firms. Many of those firms borrow in U.S. dollars, so a weaker dollar could lessen the pain of debt payments. What’s more, capital may flow to a safer dollar-driven economy like that of the U.S when the dollar is stronger. The U.S. dollar could struggle amid government volatility. Broad uncertainty about government debt, too, could loom over the currency, making emerging markets more appealing in comparison.Rise of the Emerging Market Middle ClassLong term, plenty of upside exists in emerging markets with burgeoning middle classes. India, specifically, appeals. A perennial candidate for market hype, the country’s educated middle class is growing amid an era of regulatory liberalization in the formerly red tape-ridden nation. As a market, India represents an important rising player in emerging markets. Dominated by China, India represents a middle-class option with an upside, thanks to its rising middle class.Active EM ETFs Can Reach New HighsActive ETFs marry the tight scrutiny of active investing with the tax efficiency and transparency of ETFs. That may open up a new era for investing in the category, given those attributes. The Fidelity Enhanced Emerging Markets ETF (FEMR) provides a strong candidate to fill that role. Charging 38 basis points, FEMR actively overweights emerging markets companies that stand out in the firm’s systematic and research-driven stock selection model, while underweighting or avoiding those that don’t. The proprietary model uses a multi-factor approach which includes long-term return drivers like growth, valuation, momentum, and quality. Looking ahead, funds like FEMR could help investors get into that long-term emerging markets upside. For more news, information, and analysis, visit the ETF Investing Channel. Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles. 1195192.1.0

More Commentary

Active Value ETF TVAL Adds a Quarter Billion in 1 Month
BY | ETF Database
03/31/2025 | 116 VIEWS
Gold's Rally Continues to Tee Up Opportunities for Miners
BY | ETF Database
03/31/2025 | 78 VIEWS
Active ETF Specialist T. Rowe Price Adds 2 New Active Funds
BY | ETF Database
03/28/2025 | 195 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.