President Donald Trump has delivered on one of his biggest campaign promises: A booming stock market. The US economy is roaring, and no one knows that better than stock market investors. The S&P 500—which is a strong indicator of overall stock market performance—has gained 9% so far in 2017.
The NASDAQ Composite—which includes more than 3,000 companies including heavy hitters such as Amazon—has done even better, growing by 16.7% since January 3. And don’t forget the Down Jones Industrial Average (DJIA), which was gained 10.6% this year.
That being said, the savvy American investor is looking for value everywhere, not just at home on US stock markets. In particular, investors have made big paydays this year by investing in emerging market stocks.
High-performing Funds in Emerging Markets
The iShares MSCI Emerging Markets ETF (EEM) is one indicator of strong emerging market performance. The $35 billion fund includes major emerging market stocks such as Samsung, Alibaba, and China Mobile. The stock making up the largest share of the EEM belongs to Tencent Holdings, a Chinese company involved in media, telecoms, and payment systems.
2017 has been good for the EEM. The index has gained 22% year-to-date, and some of its biggest stocks have outpaced the fund overall. Plus, it’s not the only emerging market fund that’s performing well.
The Hermes Global Emerging Markets Fund (HMGEMMZ) has also had a very good year. It has grown by over 23% percent year-to-date. The fund includes many of the same stocks as the EEM.
The Goldman Sachs Emerging Markets Equity Fund (GEMIX) is another fund worth watching. The $803 million fund has gained 30% since January 3. It includes major stocks such as Samsung, Alibaba, the Taiwan Semiconductor Manufacturing Company, and Hong Kong Exchanges and Clearing.
The Strongest Emerging Market Stocks of 2017
Alibaba (BABA) – The Chinese online retail giant is a juggernaut in a market full of juggernauts. The company’s stock (BABA) stood at $155 at the time of writing. That’s an increase of nearly 75% year-to-date. Year-on-year revenue was up 60% through March 31. The company will announce its fiscal Q1 results on August 17, and analysts expect more of the same.
Alibaba has a dominant share of the Chinese e-commerce market, and it’s now reaching into other Asian markets. The company recently invested in several Indian e-commerce companies, fueling speculation that it plans to directly enter India’s massive and growing market.
Samsung Electronics (SSNLF) – Investors in the Korean manufacturer are laughing all the way to the bank. Samsung’s stock has gained by 66% year-to-date, making it one of the strongest emerging market stocks. It enjoyed a big leap in April on news that it had reached a deal to supply 70 million display panels for Apple’s upcoming iPhone 8 anniversary edition.
Samsung’s first quarter operating profit reached 9.9 trillion Korean won ($8.7 billion), owing much to the success of its trade in the semiconductor and display industries. While still known for its success as a smartphone manufacturer, the company has diversified its revenue streams in an impressive way.
MercadoLibre (MELI) – Nicknamed the “eBay of Latin America”, the Argentinian company operates online marketplaces specializing in e-commerce and online auctions. MercadoLibre’s stock has gained 47% so far in 2017, and its value climbed as high as $297 on May 16.
Most impressive about MercadoLibre: It has had a bullish year despite poor economic conditions in two of its biggest markets, Argentina and Brazil. The company’s first quarter revenue reached $274 million on the back of a 20% percent increase in first-time customers. There’s also a lot of room for growth—Latin America has a low but growing rate of internet use. As more people log on for the first time, more people will shop with MercadoLibre.