While everyone has been focusing on U.S. stocks and President Donald Trump’s ability to make America great again, something has been quietly happening across the globe: Emerging markets have gotten hot once again.
In fact, in 2017, markets in developing areas of the world have done much, much better than the U.S.
Emerging markets — as represented by the iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) — are up by roughly 13% so far in 2017, taking in more than $675 million in new fund flows, according to FactSet. That’s a performance EEM has been unable to replicate in years. And it’s in sharp contrast to the roughly 5% gain in the S&P 500 so far this year.
If you’re not already allocated to EMs, that’s OK. Analysts are predicting that emerging markets can keep shining for the rest of the year and beyond. The vast bulk of the catalysts that are expected to drive the developing world — large populations and growing middle classes — are still intact. Recent boosts to commodity prices and local currencies have also helped push EM stocks higher.
EMs are once again the place to be. With that in mind, here are three emerging markets ETFs that should outpace the U.S. over the next year, and likely longer.