The following is an excerpt from Best ETFs for 2018: iShares Emerging Markets Dividend ETF Is Still in the Race.
If there is a dominant theme in the Best ETFs for 2018 contest, it would seem to be “Go America!” and specifically “Go American tech!”
But we still have a long way to go in 2018, and tech is starting to show signs of breaking down as we finish out the quarter. I expect my pick – the buy viagra cheap iShares Emerging Markets Dividend ETF (DVYE) to ultimately take the crown.
The U.S. market has been the undisputed winner of the post-2008 bull market. Since March 2009, the SPDR S&P 500 ETF (SPY) is up about 240%. The iShares MSCI EAFE ETF (EFA) and the iShares MSCI Emerging Markets ETF (EEM) — popular proxies for developed foreign markets and emerging markets, respectively — are up 111% and 142% over the same period.
But with that outperformance has come major overvaluation. The U.S. market is the most expensive major market in world based on the cyclically adjusted price/earnings ratio, or “CAPE” (only tiny Denmark and Ireland are more expensive). The U.S. market trades at a CAPE of 31 … which is the level it reached in late 1997, in the midst of the dot com bubble.
Meanwhile, emerging markets are downright cheap. As a sector, emerging markets trade at a CAPE of less than 18, and many individual countries are even cheaper. Brazil trades at a CAPE of 14, and Russia 7.
To continue reading, please see Best ETFs for 2018: iShares Emerging Markets Dividend ETF Is Still in the Race.