- Emerging market indices have underperformed this year largely due to immense declines in the Chinese stock market.
- Popular emerging market ETFs like VWO carry significant exposure to China, with up to 60% of its assets tied to the country.
- China has recently enacted a slew of regulatory attacks on foreign listed firms, proving that foreign investors do not control Chinese corporations.
- While VWO remains uninvestable due to its Chinese concentration risk, there are still many attractive emerging market single-country ETFs to choose from.
- In my view, those with growing exports such as Russia, Mexico, and Peru are attractive alternatives to VWO due to their strong position in the inflationary market regime.
For further details see:
VWO: China's Business Crackdown May Only Be Beginning