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This emerging markets ETF can deal with the strong dollar

By Benzinga
Asset Management

Much has been made of the strong dollar's impact on emerging markets equities and the relevant exchange traded funds. Price action bears out that impact.

Over the past year, the Vanguard FTSE Emerging Markets ETF VWO and the iShares MSCI Emerging Markets ETF EEM, the two largest emerging markets ETFs by assets, are both down just over 15 percent while the PowerShares DB US Dollar Index Bullish Fund UUP, the U.S. Dollar Index tracking ETF, is higher by 10.2 percent.

The declines of EEM and VWO do not paint the entire picture of the repudiation suffered by emerging markets ETFs at the hands of the strong greenback. From Brazil to South Africa to Turkey, scores of emerging markets funds have been pummeled by the rising dollar and speculation that higher U.S. interest rates could stoke a raft of credit ratings downgrades throughout the developing world.

Read more at Benzinga.
Photo: images money



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