VWO - VanEck is optimistic on emerging markets

Amid notable volatility in global markets, ETF issuer VanEck argued that investors can find opportunity in emerging markets, helped by the fact that global valuations have come down so dramatically in 2022.

In a research report authored by Emerging Markets Equity portfolio manager David Semple and senior product manager Oksana Miller, the exchange traded fund issuer stated : “Upsides prevail in emerging markets as multiple headwinds show signs of abating. We believe the global valuation collapse has opened up tremendous opportunities in operationally strong companies.”

VanEck also highlighted that while the third quarter was volatile, EM assets still managed to outperform their developed market peers.

“We believe that growth in EM is holding up fairly well. The boost from the staggered reopening of economies, coupled with sound fiscal and monetary policies in place, seems to have outweighed the drag from global inflation and region/country-specific rate hike disruptions,” the report stated.

Semple and Miller contended that EM economies could benefit in the near future by a possible correction in an "overvalued" U.S. dollar. However, uncertainties remain, including global inflation pressures and geopolitical tensions, the authors noted.

For investors who share a similar line of thinking, there are a large number of EM-focused ETFs available. These include Vanguard FTSE Emerging Markets ETF ( NYSEARCA: VWO ), iShares Core MSCI Emerging Markets ETF ( NYSEARCA: IEMG ), iShares MSCI Emerging Markets ETF ( NYSEARCA: EEM ), Schwab Emerging Markets Equity ETF ( NYSEARCA: SCHE ), and the SPDR Portfolio Emerging Markets ETF ( SPEM ).

Over the course of the year VWO has returned -26.5% , IEMG is -28% , while SCHE is -24.8% , and SPEM is -25.4% .

In broader financial news, major averages continue to rally on Tuesday morning as investors push the risk-on tempo.

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