New Investments and Products for Retirement (July 2 2019)

The following are new investments that those saving for or living in retirement might consider for their portfolios. This week: an ETF for emerging markets excluding China.
By Robert Powell, CFP® ,

KraneShares has launched KraneShares MSCI Emerging Markets ex China Index ETF (KEMX), an ETF that invests in securities from nearly two dozen emerging markets, excluding China. The ETF selects investments from the cap-weighted MSCI Emerging Markets ex-China Index.

"I think before you evaluate the utility of the new KraneShares ETF, you must decide whether or not you believe that retirees and pre-retirees should have emerging markets as a slice of their allocation at all," says Evan Beach, director of wealth advisory at Campbell Wealth Management.

"Our viewpoint is that they should have none or very limited exposure, especially early in retirement when you are building a bridge between your working years and claiming Social Security," he says. "If you take the other side of that argument than there could be value in an Emerging Market ex-China fund. With trade uncertainty, companies will look to other low-cost labor markets to produce their goods. This index should see benefit from that."

The returns in recent years in emerging markets has been driven mostly by the technology sector, says Beach. "Our feeling is that you can get similar upside with less volatility through a domestic technology ETF, such as QQQ," he says.

Of note, the fund is very similar to the iShares ETF, MSCI Emerging Markets Ex China (EMXC). The expense ratios are almost identical but the trade volume is 10 times higher in the iShares version. "If we were to go this route, we may go with the known entity, Blackrock," says Beach.

Got questions about the new tax law, Social Security, Medicare, retirement, investments, or money in general? Want to be considered for a Money Makeover? Email Robert.Powell@TheStreet.com.

Loading ...