As far as emerging markets go, which is the best bet? This post looks at two exchange: traded funds ADRE and VWO.
BLDRS Emerging Markets 50 ADR Index ETF (ADRE) follows the Bank of New York’s Emerging Markets ADR Index.
American Deposit Receipts (ADR) represent ownership in the shares of foreign companies trading on US markets. This is how many foreign company stocks trade on US exchanges. ADR’s enable US investors to buy non-US shares without without going international and without switching currencies. The Bank of New York is the biggest issuer of ADR’s.
Vanguard Emerging Markets ETF (VWO) (VIPERs) follows the MSCI Emerging Markets Index. Maybe it’s the investing style or the turnover rate (3% for ADRE vs. 26% for Vanguard!) or the countries covered, but ADRE beat VWO over the last couple years. Vanguard is definitely more diversified (866 stocks) vs. 50, yet offers the same low expense ratio (.3%).
It’s a tough choice, the safety of (VWO) 866 stocks vs. the low turnover of BLDRS. Between the two, I’m leaning more towards ADRE, just because I like to hold onto good finds. Maybe I’m wrong, still new to this. Feel free to comment.