International investing has been under-followed since the results of the U.S. election back in November, but based on the charts discussed in the article below, it seems that now could be a good time to increase exposure. Furthermore, taking a global view when it comes to investing strategy could be the ideal method of spreading investment risk and minimizing the impacts of upcoming political, economic and social events. (For more on this topic, check out: Active Traders Turn to Emerging Markets).

iShares MSCI Emerging Markets ETF

One of the most popular exchange-traded products used by active traders for gaining exposure to mid and large-sized companies from countries such as China, Korea, Taiwan, India and South Africa is the iShares MSCI Emerging Markets ETF (EFA). As you can see from the chart below, the price has recently trended toward the long-term support of its 200-day moving average (red line), which is a common technical level used for determining the direction of major trends. The nearby support and bullish price action in recent sessions suggest that the bulls are now in control of the momentum and the lucrative risk/reward setup could be an ideal time to open a position. Active traders will likely maintain a bullish outlook on this fund until the price closes below $56.76. (For more, see: Traders Are Watching for a Bounce in These Emerging Markets).

iShares Emerging Markets Dividend ETF

For international investors looking to increase exposure to income-generating assets, one ETF to consider could be the iShares Emerging Markets Dividend ETF (DVYE). This fund has been designed by its managers to offer investors exposure to a broad range of established dividend-paying companies from countries such as Taiwan, China, Brazil, Thailand, Malaysia, Turkey, and Poland. The fund had a 30-day SEC Yield of 5.68% as of November 2016, and it carries a reasonable expense ratio of 0.49%. Taking a look at the chart, you can see that the fund is trading near the support of its 200-day moving average just like the case of EFA shown above. This chart is a textbook example of how active traders would expect the price to behavior near this long-term indicator. Notice how the price provided support on each attempted pullback following the breakout in April 2016. Traders would expect this type of support to continue and will likely set their stop-loss orders below $33.63 in the case of a shift in sentiment. (For more, see: Top Emerging Markets Dividend ETFs).

PowerShares Emerging Markets Infrastructure Portfolio

Just like in the United States, governments in emerging markets around the world are looking to develop their infrastructure. As a result of increased spending in industries such as construction and engineering, many investors are turning to products such as the PowerShares Emerging Markets Infrastructure Portfolio (PXR). As suggested above, this fund is heavily dominated by holdings in the industrials and materials sectors and range from countries such as China, Taiwan, Mexico, India, Brazil, and Malaysia. This fund trades with a management fee that of 0.75% and is comprised of 84 holdings. Taking a look at the chart, you can see the similar pattern as shown above where the price is finding support near its 200-day moving average ($30.05). Traders will likely use the bullish crossover between the MACD indicator and its signal line as confirmation of the move higher, and they will likely maintain a bullish outlook until the price moves below the aforementioned support. (For more on this topic, see: 3 Commodity Charts To Watch In 2017).

The Bottom Line

Emerging markets have been neglected since the majority of the attention from North American investors has flocked to domestic markets. However, based on the charts of the several ETFs shown above, it appears as though 2017 could be quite promising for those looking to diversify their portfolios by adding exposure to emerging markets. (For more, see: Emerging Markets Have Found Support and Are Heading Higher).

At the time of writing, Casey Murphy did not own any of the products mentioned in this article.

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