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How to make money on the fall of the dollar? Developing country ETFs

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The dollar is getting cheaper against a wide range of currencies. November was a difficult month for the global reserve currency, and December did not bring much relief. This raises a question. And how to make money in the fall?

One of the ways is to invest in emerging market funds, because a decline in the US currency usually benefits them.

Emerging market assets mostly keep pace with the leading us indices. the iShares MSCI Emerging Markets ETF (EEM), for example, has risen more than 13% since the beginning of the year and reached an all-time high of $50.99 on December 7. By comparison, the S&P 500 index is up about 17% this year.

If the dollar weakens further, emerging markets could reach new record highs.

In today’s article, we will look at two emerging market-focused funds that are worth paying attention to as the USD weakens.

  1. Schwab Emerging Markets Equity ETF
  2. iShares MSCI Emerging Markets ex China ETF
  1. iShares MSCI Emerging Markets ex China ETF
SCHE Schwab Emerging Markets Equity ETF Stock Quote
  • Cost: $55.56;
  • Dividend yield: 2.98%;
  • Commission: 0.16%.

iShares MSCI Emerging Markets ex China ETF (EMXC) allows you to invest in companies in developing countries (excluding China) with large and medium capitalization. The Fund was launched in August 2017 and currently manages a portfolio of 530 assets worth about $109 million.

EMXC is based on the MSCI Emerging Markets ex China index. 21.78% of the securities were issued by South Korean companies, followed by companies from Taiwan (20.37%), India (14.76%), Brazil (8.29%), South Africa (5.69%) and the Russian Federation (4.77%).

The list is headed by iShares MSCI India ETF (INDA); SK Hynix (000660); Taiwan Semiconductor (5425), (TSM); South Korean microelectronics manufacturers Samsung Electronics (005930), (SSNLF) and , as well as Naspers.

Since the beginning of the year, the Fund has grown by 8.5%. In the case of short-term profit-taking, long-term investors can enter the market around the $52 mark.

  1. Schwab Emerging Markets Equity ETF
EMXC iShares MSCI Emerging Markets ex China ETF Stock Quote
  • Cost: $30.60;
  • Dividend yield: 2.76%;
  • Commission: 0.11%.

The Schwab Emerging Markets Equity ETF (SCHE) provides access to shares of large and medium-sized companies in emerging markets. The Fund was launched in January 2010.

The SCHE portfolio consists of 1,540 components of the FTSE Emerging Index. About 28% of assets amounting to $ 8.2 billion are allocated for the ten largest investments.

The list of assets is led by the securities of social media and entertainment market heavyweight Tencent Holdings (0700) (TME); Chinese e-Commerce giant Alibaba (9988), (BABA); microelectronics leader Taiwan Semiconductor (5425), (TSM); Chinese food delivery platform Meituan (3690), (MPNGY) and Internet group Naspers (NPNJn), (NPSNY) with headquarters in South Africa.

Over the year, SCHE grew by more than 1%. Given the recent surge in prices, some of the Fund’s largest components may come under short-term pressure. A drawdown will provide long-term investors with a better entry point to the market.

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