Should You Be Buying Emerging Market Equities?

After a period of underperformance compared to the US and UK stock markets, emerging markets look attractively valued. But should you be upping your exposure?

Christine Benz 9 April, 2015 | 12:33PM

Emerging markets look cheap. Or is Europe the true pocket of opportunity? Or perhaps Japan's current rally has staying power? 

Investors may have recently heard various market experts suggesting that foreign stocks have better upside potential than U.S. names. The most straightforward way to potentially profit from such an idea is to simply boost a portfolio's exposure to a broadly diversified global-stock fund – whether an actively managed offering or index fund – and call it a day. 

But how about for investors who would like to be more opportunistic, perhaps giving a slight tilt to truly undervalued foreign-domiciled names while de-emphasizing the parts of foreign markets that appear to have less upside potential? Which portfolio additions will give them the biggest bang for their rebalancing buck? 

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Christine Benz

Christine Benz  is director of personal finance at Morningstar and author of 30-Minute Money Solutions: A Step-by-Step Guide to Managing Your Finances.

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