With slower growth affecting much of the developed world, investors have started to show a preference for faster moving emerging markets. Once exotic nations like China, Brazil and Malaysia have become common place in many portfolios. The broad-based iShares MSCI Emerging Markets ETF (NYSE:EEM) has grown to nearly $38 billion in assets. However, despite the rosy long term picture for these nations, the short term ride is often bumpy. Volatility remains a constant issue for investors in developing countries. Nevertheless, there is a way for investors to smooth out their ride and get some much needed income.
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Not Just Growth Elements
While many investors look towards the emerging world for a capital gain component, the regions are quickly becoming income plays as well. In the past, it was difficult to find dividend paying stocks located in emerging markets. But as these countries have grown and developed, dividend paying companies have become much more prevalent. Foreign firms have traditionally held a more dividend-friendly culture, paying them to shareholders rather than keeping them as retained earnings. This is holding true in the emerging market sector as well. According to asset manager WisdomTree Investments (Nasdaq:WETF), emerging markets paid more than $175 billion in dividends during 2011 and delivered some of the fastest growth in aggregate dividend streams among major regions... read more.
While many investors look towards the emerging world for a capital gain component, the regions are quickly becoming income plays as well. In the past, it was difficult to find dividend paying stocks located in emerging markets. But as these countries have grown and developed, dividend paying companies have become much more prevalent. Foreign firms have traditionally held a more dividend-friendly culture, paying them to shareholders rather than keeping them as retained earnings. This is holding true in the emerging market sector as well. According to asset manager WisdomTree Investments (Nasdaq:WETF), emerging markets paid more than $175 billion in dividends during 2011 and delivered some of the fastest growth in aggregate dividend streams among major regions... read more.
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