KraneShares MSCI Emerging Markets Ex China Index ETF

KEMX

Market cap $68.5M

Getting emerging market exposure is a viable option in the current market environment. That's especially so given the global de-dollarization and prospect of further rate cuts by the Federal Reserve.

Concerns of tariff and trade wars with China may leave investors sitting on the sideline when it comes to China and EM exposures. The KraneShares Dynamic Emerging Markets Strategy ETF (KEM) actively manages its China exposures while investing in EM countries.

Concerns of geopolitical risk, tariff wars, and more leave some advisors and investors second guessing China this year. For those looking to invest in emerging markets but address China exposures separately, the KraneShares MSCI Emerging Markets ex-China Index ETF (KEMX) may provide a solution.

On the lookout for emerging markets investing opportunities? Most emerging markets indexes, of course, contain significant exposure to the biggest “emerging” market, China.

Emerging markets investing offers investors a really useful tool to get foreign diversification with potential upside. Of course, not all emerging markets ETFs are created equal, nor have emerging markets always delivered on their performance goals.

Is now the time to look abroad in an emerging markets ETF? U.S. equities have become very expensive and, despite the potential for rate cuts domestically, they have yet to actually materialize.

The elephant in the emerging markets (EM) room is China, and not just because it's the world's second-largest economy behind only the U.S. By virtue of that heft, China is also, typically, the biggest geographic exposure in traditional diversified EM exchange traded funds.

Emerging markets equities and the related ETFs have long been responsive to Federal Reserve decisions on U.S. interest rates. This indicates that if the central pares rates this year, some upside could be in store for those long-lagging assets.

Investing abroad? Opportunities abound in emerging markets, but one particular emerging markets ETF is standing out right now.

Emerging markets are off to a sluggish start to 2024. The Vanguard FTSE Emerging Markets ETF (VWO) was up 1.9% year-to-date through March 20, lagging the S&P 500 Index's nearly 10% gain.