10 Best Emerging Markets Funds for 2012

NEW YORK ( TheStreet Ratings) -- TheStreet Ratings reviews the risk-adjusted return performance of around 25,000 funds every month. The best rated emerging markets exchange-traded funds for 2012 are listed each month at TheStreet's Top-Rated ETFs page.

Only two exchange-traded emerging markets funds ranked in the "Buy" range. So, our listing of the top funds in this category takes an expanded look to include seven open-end stock funds, two open-end bond funds, and one traditional closed-end fund, all of which outperformed the exchange-traded funds in our rankings.

Here are the 10 best emerging markets funds for 2012:

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10. Wells Fargo Adv Emerg Mkts Eq A

Wells Fargo Adv Emerg Mkts Eq A ( EMGAX) has an investment objective to provide shareholders with long term capital growth. The fund may invest at least 80% of its assets in equity securities of issuers located in emerging markets. Emerging markets countries include but are not limited to South Korea, Brazil, Russia, China, South Africa, Mexico, Taiwan, India, and Malaysia. The fund may invest in at least six different countries although it may invest all of its assets in a single country. The fund may invest in securities across all market capitalizations, seeking investments that offer potential growth opportunities attributable to factors such as political change, economic deregulation and liberalized trade policy.

Expense Ratio: 1.84%

Front Load: 5.75%

Back Load: 0.00%

Rated "A-" by TheStreet Ratings

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9. SEI Inst Intl Emerging Mkts Debt A

SEI Inst Intl Emerging Mkts Debt A ( SITEX) seeks to maximize total return. The fund invests at least 80% of its net assets in fixed income securities of emerging markets issuers and invests primarily in U.S. dollar denominated debt securities of government related and corporate issuers in emerging market countries as well as entities organized to restructure the outstanding debt of such issuers.

Expense Ratio: 1.79%

Front Load: 0.00%

Back Load: 0.00%

Rated "A-" by TheStreet Ratings

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8. Fidelity New Markets Income

Fidelity New Markets Income ( FNMIX) seeks high current income and capital appreciation. The fund normally invests at least 80 percent of assets in securities of issuers in emerging markets and other investments that are tied economically to emerging markets and invests potentially in other types of securities including equity securities of emerging market issuers, debt securities of non-emerging market foreign issuers and lower quality debt securities of U.S. issuers. The fund allocates investments across countries considering the size of the market in each country relative to the size of the markets in countries considered emerging markets as a whole.

Expense Ratio: 0.89%

Front Load: 0.00%

Back Load: 1.00%

Rated "A-" by TheStreet Ratings

7. Aberdeen Indonesia Fund

Aberdeen Indonesia Fund ( IF) is a non-diversified, closed-end management investment company. The fund's primary investment objective is capital appreciation with income as a secondary objective, which the fund seeks to achieve by investing primarily in Indonesian equity and debt securities. The fund will invest substantially all of its assets, not less than 80% of its net assets, in Indonesian equity and debt securities. The remainder of the fund's assets may be invested in non-Indonesian equity and debt securities of corporate and government entities and, for cash management purposes, short-term instruments. The fund may invest up to 20% of its net assets in unlisted Indonesian equity securities.

Expense Ratio: 1.52%

Front Load: 0.00%

Back Load: 0.00%

Rated "A" by TheStreet Ratings

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6. Fidelity Adv Emerging Asia A

Fidelity Adv Emerging Asia A ( FEAAX) has a principal investment objective to seek long term capital appreciation. The fund invests at least 80 percent of its net assets in securities of Asian emerging market issuers and other investments that are tied economically to Asian emerging markets. The fund invests primarily in common stocks. The fund allocates investments across countries considering the size of the market in each country relative to the size of the markets in Asian countries with emerging markets as a whole. The fund uses fundamental analysis on financial condition, industry position, market, and economic conditions to select investments.

Expense Ratio: 1.44%

Front Load: 5.75%

Back Load: 1.50%

Rated "A" by TheStreet Ratings

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5. Franklin India Growth Fund A

Franklin India Growth Fund A ( FINGX) has an investment objective of long term capital appreciation. The fund invests 80% of its net assets in equity securities of India-focused companies. These companies held derive 50% or more of their total revenue or profit from either goods or services produced or sales made in India and have 50% or more of their assets in India. The fund may invest up to 20% of its net assets in securities that do not meet this qualification as Indian company securities. The fund uses a bottom up approach in selecting the securities.

Expense Ratio: 2.12%

Front Load: 5.75%

Back Load: 0.00%

Rated "A" by TheStreet Ratings

4. Causeway Emerging Mkt Inv

Causeway Emerging Mkt Inv ( CEMVX) seeks long term growth of capital. The fund invests at least 80% of its total assets in equity securities of companies in emerging markets and other investments that are tied economically to emerging markets. The fund may also invest in forward foreign currency exchange contracts and other derivatives. The fund uses a quantitative investment approach to selecting investments for the fund.

Expense Ratio: 2.11%

Front Load: 0.00%

Back Load: 2.00%

Rated "A" by TheStreet Ratings

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3. Laudus Mondrian Emg Mkts Inv

Laudus Mondrian Emg Mkts Inv ( LEMIX) seeks long-term capital appreciation. The fund will invest at least 80% of its net assets in the securities of emerging markets issuers. While the fund will not concentrate more than 25% of its assets in any single industry, the fund may focus its investments in companies in each of the financial services, energy and natural resources sectors, each of which comprises several related industries. The fund is an international fund and generally invests in large capitalization equity securities, $5 billion or more, of emerging market companies. The fund will invest in a portfolio of approximately 30 to 40 securities.

Expense Ratio: 1.91%

Front Load: 0.00%

Back Load: 2.00%

Rated "A" by TheStreet Ratings

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2. Aberdeen Emerging Markets A

Aberdeen Emerging Markets A ( GEGAX) has an objective to seek long term capital growth by investing primarily in equity securities of companies located in emerging market countries. The fund may invest at least 80% of its net assets in equity securities. The fund also may use derivatives such as futures and options for efficient portfolio management. The fund emphasizes companies that the portfolio manager believes have the potential to deliver unexpected earnings. The portfolio manager looks for emerging markets that he believes offer the potential for strong economic growth, and tries to avoid emerging markets he believes might be politically or economically unstable. The fund manager uses a bottom-up equity investment approach for selecting the stocks.

Expense Ratio: 1.95%

Front Load: 5.75%

Back Load: 2.00%

Rated "A+" by TheStreet Ratings

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1. Virtus Emerging Mkt Opp A

Virtus Emerging Mkt Opp A ( HEMZX) has an investment objective to seek capital appreciation. The fund normally invests at least 80% of its assets in equity securities of issuers located in emerging markets countries. The fund invests in issuers with the potential for long term capital appreciation using a value approach. The fund may invest substantially all of its assets in common stocks if the sub adviser believes that common stocks will appreciate in value. The sub adviser of the fund uses a bottom-up stock and business analysis approach.

Expense Ratio: 1.67%

Front Load: 5.75%

Back Load: 0.00%

Rated "A+" by TheStreet Ratings

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How We Rate Funds

TheStreet Ratings condenses the available fund performance and risk data, including penalties for load charges, into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. While there is no guarantee of future performance, these investment ratings provide a solid framework for making informed, timely investment decisions. In order to qualify for a rating, an open-end fund must either have three years of risk and return data or be an additional share class of an existing fund with at least three years of performance statistics.

Funds rated "A" or "B" are considered "Buy" based on a track record of higher than average risk-adjusted performance. Funds at the "C" level are rated as "Hold," while underperformers at the "D" and "E" levels our model ranks as "Sell."

-- Written by Kevin Baker in Jupiter, Fla.

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Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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