SPEM - SPEM: Diversify Into Emerging Markets
2024-05-30 23:20:56 ET
Summary
- Stretched valuations in US equity markets raise concern and suggest investors should look globally for investment opportunities.
- The SPDR Portfolio Emerging Markets ETF is a solid low-cost investment vehicle providing exposure to the investable universe in Emerging Markets.
- SPEM's ability to invest in smaller-cap equities allows it to outperform other EM funds that focus solely on large- and mid-cap equities.
Recently, I have been writing a lot about stretched valuations in U.S. equity markets and how investors can protect their portfolios against possible drawdowns. For example, based on consensus estimates, the S&P 500 Index's 21x Fwd P/E is amongst the highest in its history except for the dot-com bubble and early 2021 (Figure 1).
Figure 1 - U.S. equity valuations are stretched (yardeni.com)
These strategies include something as simple as taking profits on big winners to reallocating funds to hedged products like the JPMorgan Hedged Equity Laddered Overlay ETF ( HELO ) or the First Trust Long/Short Equity ETF ( FTLS ) that can reduce portfolio downside....
SPEM: Diversify Into Emerging Markets