Lyxor ETF Emerging Markets, Which ETF Should You Choose?

The ETF which replicate representative indices of emerging markets offer attractive investment opportunities. The recently industrialized nations – which weigh globally – are going through a phase of rapid growth that allows above-average returns.

Lyxor International Asset Managementone of the leading ETF providers in Europe, offers various investment solutions for those who want to include in their portfolio even those countries that do not fall into the group of developed economies.

Let’s see with this short guide which ones ETF Lyxor allow you to replicate the markets of countries in full economic development, and how you need to move to avoid damage!

I remind you that investing in less regulated markets, and more subject to turbulence, can significantly raise the level of risk to which your portfolio is exposed. It can be very risky to invest in an ETF of this category if you don’t diversify properly.

Let’s start.

General characteristics of Emerging Markets ETFs

The ETF Lyxor Emerging Markets they make it possible to replicate the performance of indices that group the largest companies in developing countries. This makes it possible to participate in the long-term growth of these still young economies.

It should be emphasized that not always the dividing line between developed and emerging countries it is clear. Some countries, whose position is not well defined, may be included in one or the other group based on the index.

Typically the economies considered “emerging” are China, Brazil, Russia, India (these first 4 are the most important), South Korea, Indonesia, Malaysia, Mexico, Thailand, South Africa, Turkey and extending some Countries of Eastern Europe and Latin America.

The most important player of all is obviously the Chinesewith its growing weight in global indices.

Lyxor ETFs: opportunities

Lyxor offers twenty Stock ETFs in the “Emerging Markets” category which replicate the performance of leading companies from countries such as China, India, Russia, Brazil, Korea and Indonesia.

Wanting to extend the range, there are ETFs that replicate broader indices, with exposure to geographical areas and entire continents: ETFs on Africa, Asia, Eastern Europe and Latin America. Of course, there is no shortage of ETFs on global indices.

Most of the ETFs on the list are ad accumulation of the proceeds.

In addition to equity ETFs, it should be remembered that exposure to emerging markets can also be achieved through bond ETFs and commodity ETFs. In this case the Lyxor offer is limited.

Where should you invest?

In my opinion, the most interesting ETFs are those that follow a global index or in any case a fairly large index; this is because they give an overview of all that the part of the world that is not yet fully developed can offer.

The advantage of global ETFs is that offer coverage compared to the imbalances that can affect a single economy.

However, certain huge countries such as China then tend to influence the other economies dependent on it (and not just the developing ones); that’s why no emerging market ETF, even when tracking a global index, can be considered a good investment strategy on its own.

On the other hand, I advise against the use of too specific ETFs since they are totally dependent on the economic and political dynamics of a single country and economic sector. These funds should be integrated into the portfolio only if there is an upstream ratio.

Lyxor ETF on global indices

There are 3 important indices that follow the trend of emerging markets at an international level, of these the most important is theMSCI Emerging Marketsa stock index that follows 27 countries and is made up of 1,412 stocks.

As you can imagine, China is the nation that plays the leading role in the index; followed by Taiwan and South Korea.

Lyxor follows the index across 3 ETF:

• Lyxor MSCI Emerging Markets (LUX) UCITS ETF – Acc;
• Lyxor MSCI Emerging Markets (LUX) UCITS ETF – Acc EUR;
• Lyxor MSCI Emerging Markets (LUX) UCITS ETF – Dist.

Who wants eliminate exposure to China may invest in the ETF “Lyxor MSCI Emerging Markets Ex China UCITS ETF – Acc” which tracks an MSCI index featuring the same countries in the MSCI Emerging Markets index excluding China.

I also mention the “Lyxor MSCI EM ESG Leaders Extra UCITS ETF – Acc” fund, an ETF that aims to replicate the MSCI EM Select ESG Rating and Trend Leaders Net Return USD Index, representative of companies with an ESG profile (Environmental, Social, governance). Based on the main MSCI Emerging Markets index, this ETF excludes companies that do not comply with sustainability and ethical criteria.

Lastly, I underline how it is possible to have a good exposure to emerging markets just by choosing an index inclusive of nearly all developed and developing markets. Lyxor offers an ETF with these characteristics: the “Lyxor MSCI All Country World UCITS ETF – Acc (EUR)” fund.

How to find the right ETF

Lyxor’s ETFs are effective publicly traded investment vehicles that offer transparent, liquid and low cost exposure to your chosen index.

To find the right ETF among those available, go to the Italian Lyxor website and use the search form – taking care to use the filters to limit the field of interest.

To invest, however, you will have to contact an authorized intermediary.

Final opinions of Affari Miei

The ETF Lyxor they are valid tools for investing that allow you to implement any type of strategy at low cost. It is no coincidence that they are included in the model portfolios of Fast Investments Plannerthe advanced financial information service that helps you invest independently thanks to the advice of Study Center of My Business.

However, just because the brand is good doesn’t mean that all ETFs are. The choice of the single instrument must be weighed carefully. In addition to considering costs, liquidity, size of the ETF and other parameters, you also need to consider the associated risks to the financial instruments in the basket.

As we have already mentioned, investments in emerging markets involve greater risks than those in developed countries. Therefore you must approach these markets with great caution and rationality. Always remember to diversify your portfolio ranging among the numerous financial solutions offered by the world of investments.

Conclusions

If you’re at the beginning of your investment journey, you might think that you don’t need great strategies and knowledge to operate on the markets with an ETF.

Wrong! There is no tool that frees you from your responsibilities. If you don’t know what you’re doing, you can only invest badly, regardless of the medium you use.

If you don’t have the basics, stop and start from scratch by reading the guides for investing:

For now, goodbye and I wish you a good investment.