NEW YORK ( TheStreet) -- Emerging market countries have been a hot commodity for years, as investors have poured billions of dollars into these economies as a way of diversifying their portfolio. These up-and-coming economies offer many attractive qualities over developed markets, which can include: Lower debt burdens, solid economic prospects, high levels of natural resources and a burgeoning workforce.Two of the largest exchange-traded funds in this space are the iShares MSCI Emerging Markets ETF ( EEM) and the Vanguard FTSE Emerging Market ETF ( VWO). Both of these funds invest in a diversified basket of large- and mid-cap companies in several emerging-market countries. Below are the weightings for each of the top 10 countries in their respective ETF.
Emerging markets peaked at the end of 2012 and have been on a slow descent ever since. Despite the double-digit returns of the SPDR S&P 500 ( SPY) this year, emerging markets have not risen at the same pace as the U.S. I believe that this is largely due to the trend of investors shunning risk assets in favor of more stalwart, defensive and dividend-oriented stocks. We have seen a tremendous amount of money flow into low-volatility stocks and bonds over the last 12 months, which has pushed those asset prices to new all-time highs. The comparison of EEM vs. SPY in the chart below shows the distinct difference in total return since the beginning of the year.
iShares MSCI Malaysia ETF ( EWM) +11.04%
MarketVectors Indonesia Index ETF ( IDX) +14.00%