CNBC published an article today outlining how investors can take advantage of the rampant growth in emerging markets without investing directly in individual stocks and taking on individual company risk. However, they left out what the instruments are to do so, so I’ll fill in the blanks:
Currencies:
As the US and Europe continue to accrue debt via the welfare states we’re creating, emerging markets are at the other end of the spectrum (pretty much too far in the other direction). In general, there are large disparities in income and the government does not take very good care of their people as evidenced by the deplorable condition millions live in today. From an investment standpoint, this fact coupled with the rapid growth in selling to the West should continue to translate into strengthening currencies vs. the US Dollar. In order to exploit this trend that has continued for years now, see this article on all the various Currency ETFs out there.
Commodities:
I outlined here in this Precious Metals ETF article several different investing instruments to exploit the combination of increased demand for these materials coupled with a weakening US currency. Since commodities are priced in US Dollars, as the dollar weakens, that translates into a rapidly increasing price. In your own personal finances, it’s easy (and important) to hedge energy prices for your own consumption. I hedge gasoline prices effortlessly for instance.
Country ETFs:
If interested in individual country ETFs comprised of many stocks or even regional/theme ETFs like BRIC, Asia Pacific, etc., check out this article on all Emerging Market ETFs.
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