Two emerging-markets funds win Silver ratings

Passively managed ETFs are low-fee alternatives.

Craig Sebastiano 23 August, 2016 | 5:00PM
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Investors looking for equity exposure outside Canada may want to consider allocating part of their foreign holdings to emerging-markets funds. They invest in countries -- such as China, India and Mexico -- whose economies tend to be growing faster than the developed world. The category is widely diversified by region, encompassing Asia, Latin America, Africa and Eastern Europe.

In recent years, and for that matter over the past decade, investing in emerging-markets equities generally hasn't paid off. But developing countries with above-average growth rates, improving standards of living and a growing middle-class have the potential to produce above-average returns, as they have at times in the past, while providing greater geographic diversification for investors.

Morningstar's manager research team has given Silver ratings to two mutual funds in the Emerging Markets Equity category. These funds are highlighted below, as are two passively managed exchange-traded funds that are among the low-cost alternatives:

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About Author

Craig Sebastiano

Craig Sebastiano  Craig Sebastiano is a freelance writer based in Toronto. He writes about topics related to personal finance, investing, retirement and real estate. He has worked at BNN, Benefits Canada and StockHouse.

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