There’s probably very good reasons why these sorts of ETFs aren’t available, but it seems like a lot of “emerging markets” ETFs only cover a fairly narrow range of markets, including markets like South Korea, China, Greece, and Taiwan which can hardly be considered “emerging”. Disappointingly, these markets seem to make up a large share of most “emerging markets” ETFs.
There are currently dedicated ETFs for Latin America (as well as ones specifically for Mexico and Brazil), India, Indonesia, and South Africa. It would be great to have some more.
I’d like to be able to expose myself to markets with serious growth potential over the next 30 years - I’m thinking of places like Pakistan and Kenya. Ideally I’d like some way of investing in Nigeria, Bangladesh, Tanzania, and Cote D’Ivoire, but it doesn’t seem like any ETF on the LSE has significant exposure to those markets due to their market conditions. Similarly, it seems difficult to invest in countries like Botswana, Uruguay, Costa Rica and Namibia despite their good governance - but their small populations probably make it less worthwhile. I’d also like to be able to increase my exposure to markets like Malaysia, Thailand, Vietnam, Egypt, and the Philippines beyond what is currently possible on InvestEngine.
The topic of ‘emerging market’ ETF has been brought up many time. No matter how much I like the IE platform, I think they are really not doing anything about it.
I first brought up the topic of suggesting including some ex-China emerging market ETFs like a year ago, got some others supporting the ideas, but nothing has happened since. I ended up needing to liquidate my emerging market ETF and turned to the limited choices of single country ETF to create my own portfolio (now mostly India, which is one of the limited choices available in IE).
I think it is time to admit that IE does not really provide a lot of options in terms of investments. While they claim that they let you choose from hundreds of funds, many are just duplicates - there are like 5-6 S&P 500 tracking ETFs but they basically are all doing the same things so they are basically the same choice. For emerging market ETFs, again, many of them are more or less the same: some 35% China, 15% Taiwan, etc. so again they are again basically the same choice.
I agree…the options to diversify are limited with IE. Even if they have some emerging market ETFs, these are not well-traded [low trade volume] on the LSE. So, we may end up buying them [expect a long delay in settlement on IE–another challenge and a lot of blog posts on this topic] but it is not easy to sell them; making the entire process semi-illiquid.
I have kept my IE portfolio focused on the developed market and a couple of themes, but for the emerging market, my investments have been via the Fidelity platform.
There seem to be some challenges for IE. A team that lets customers openly speak about their experience on the company blog, would ideally want to use this information to develop a winning product. But, somehow, the IE team is not able to address the challenges discussed via these blogs. And I have noticed this for a year and more.
When asked to add volume traded on LSE for each ETF, they have deleted the Factsheet as well from each ETF page.
In their quest to be different, they have some features that just do not make sense…for example, the graphs for each ETF … their graphs show months, 1 year and max. What is ‘max’? I do not understand the reason why there are also no metrics for each ETF- like P/E, P/B, etc.
What you’re looking for is rather Frontier Markets ETFs, or ex-China EM ETFs.
There aren’t any good ETF options available in UK to my knowledge, I personally invest in the Redwheel Next Generation Emerging Markets Equity Fund on ajBell - (which is a frontier fund) - there is a greater justification to go with an actively managed fund when dealing with illiquid shares.
Right you are. Thailand or Malaysia would have been better examples.
If they bring in the rule allowing you to contribute to more than one S&S ISA a year then I’ve found some funds on both HL and AJ Bell that appeal. They’re obviously high-risk and low liquidity (as well as higher fee) so I’d not be comfortable putting all my saving for a year in those - and I’d want to keep cost-averaging my InvestEngine portfolio.
I had a look through the IE ETF range today. Perhaps I simply missed these before, but it does seem like a few “country-specific” ETFs have been added, both for developed and near-developed countries. I don’t remember seeing French or Dutch ETFs before, nor Taiwanese and Korean.
The closest to interesting me are the Polish and Turkish ETFs, but these have even higher fees than South Africa.
XCX4 (Thailand) seems like a realistic addition - listed on the LSE, traded in GBP. Only downside I can see (from the perspective of the platform) is that it seems to be pretty low-volume, so might have delayed settlements. From an investor perspective, there are more reasons to be cautious, but personally I’d invest.