Global X says double down on emerging markets

The emerging markets trade is gaining attention amidst the ongoing war with Iran, with Global X ETFs’ Malcolm Dorson pointing to weakening dollar trends and domestic uncertainty as potential tailwinds for the group. Despite the risks involved, Dorson believes that now might be the time to consider doubling down on investments in emerging markets.

Dorson anticipates that an increase in U.S. war spending will lead to a softening of the dollar, which saw a recent surge in value. This, in turn, could create a favorable environment for emerging markets to thrive. While acknowledging the current strength of the dollar, Dorson remains optimistic about the potential opportunities in emerging markets.

The iShares MSCI Emerging Markets ETF (EEM) has experienced a slight dip of over 5% this week but remains up nearly 37% over the past year. Cinthia Murphy of VettaFi also sees advantages in investing abroad, noting that investors have become accustomed to geopolitical uncertainties.

Energy markets are especially worth monitoring in light of the prolonged conflict with Iran. Murphy points out that European markets heavily rely on energy sources from the Middle East, making them particularly vulnerable to any disruptions in the region. She suggests considering the United States Oil Fund (USO) as a potential investment opportunity in the energy sector, given its strong performance this year.

Overall, international investments have been a standout choice for investors this year, with a focus on emerging markets and energy sectors. As geopolitical tensions continue to unfold, staying informed and diversifying one’s portfolio may be key to navigating the evolving market landscape.