During the rally over the last couple of months, many investors have focused their attention on the the importance of emerging markets and the key role that these areas play in ways to survive a market downturn. While the S&P 500 Index is the traditional benchmark, many professional investment advisors are looking abroad for ideas that will help expand their portfolio mix. Let's take a look at the components of a top emerging market ETFs for some ideas that could be a good addition to a diversified portfolio.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Around The World With Vanguard
The Vanguard Emerging Markets ETF (ARCA:VWO) is one of the best options an investor can choose, given its low expense ratio. The VWO fund has a regional focus heavily concentrated the Asia ex-Japan market and Latin America, with over 50% of its assets divided between South Korea, Brazil, China, Taiwan and South Africa. Top holdings in the VWO fund include Hong Kong-based telecommunications provider China Mobile (NYSE:CHL), the Russia-based oil and gas services company Gazprom and Brazil's Oil & Gas giant Petroleo Brasileiro (NYSE:PBR).

SEE: Finding Fortune In Foreign-Stock ETFs

China Mobile reported a 7.8% increase in operating revenue and a 6% increase in EBITDA for the period from January 1, 2010 to September 30, 2010. The increase in revenues was driven both by an increase in new subscribers from the rural market and expanded usage of value-added businesses like mobile video and mobile gaming.

Oil & Gas Services
Led by higher domestic sales of and increased export prices, Petrobras increased net income in the first nine months by 27.9% to $13.3B compared to $10.4B in the same period. Adjusted EBITDA was U.S. $24.2 billion in the first nine months, compared to U.S. $20.8 billion on the same period of 2009.

Variety of ETFs
Emerging market ETFs, with a similar objective as the VWO fund, include the iShares MSCI Emerging Markets (ARCA:EEM), the SPDR S&P Emerging Markets (ARCA:GMM) and the PowerShares FTSERAFI Emerging Markets (ARCA:PXH).

SEE: Re-Evaluating Emerging Markets

The Bottom Line
The U.S. does not exist in a bubble and the same is true for investors who have the luxury of time on their hands to absorb the additional risks associated with investing in emerging markets. An investor's best approach involves building a diversified portfolio of investments, while including emerging market ETFs as a growth driver.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    Top 3 Commodities Mutual Funds

    Get information about some of the most popular and best-performing mutual funds that are focused on commodity-related investments.
  2. Chart Advisor

    Agriculture Commodities Are In The Bear's Sights

    Agriculture stocks have experienced strong moves higher over recent weeks, but chart patterns on sugar, corn and wheat are suggesting the moves could be short lived.
  3. Investing News

    Top Tips for Diversifying with Mutual Funds

    Are mutual funds becoming obsolete? If they have something to offer, which funds should you consider for diversification?
  4. Professionals

    Top Stocks to Short, Go Long On to Beat the Market

    A long/short portfolio can help weather a variety of market scenarios. Here's how to put one together.
  5. Mutual Funds & ETFs

    Top 4 Asia-Pacific ETFs

    Learn about four of the best-performing exchange-traded funds, or ETFs, that offer investors exposure to the Asia-Pacific region.
  6. Mutual Funds & ETFs

    Top 3 Japanese Bond ETFs

    Learn about the top three exchange-traded funds (ETFs) that invest in sovereign and corporate bonds issued by developed countries, including Japan.
  7. Stock Analysis

    The 5 Biggest Russian Oil Companies

    Discover the top Russian oil companies by production volume and find out more about their domestic and international business operations.
  8. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  9. Savings

    Become Your Own Financial Advisor

    If you have some financial know-how, you don’t have to hire someone to advise you on investments. This tutorial will help you set goals – and get started.
  10. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  2. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  3. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  4. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  5. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  6. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!