Emerging Mkts Fund - should I switch to ETF?

[kaudrey]

Hi everyone,

I'm making some adjustments to my portfolio. I have about 3% of my portfolio in T Rowe Price's Emerging Market Stock Fund (PRMSX). It is in an IRA. I want to up my allocation to emerging markets to 5%, and I have the cash to do that, but then I was thinking that I should put the entire 5% in an Emerging Markets ETF instead.

PRMSX has an expense ratio of 1.27%, and with Schwab I pay a small commission on it when I trade.

I didn't originally go the ETF route because I thought I'd buy in small increments, but now I believe I'll just buy a bunch and then rebalance once a year.

So, do you think I should sell PRMSX and buy an ETF instead?

My choices seem to be: Vanguard Emerging Market VIPERS, iSHAREs MSCI Emerging Market Index, and BLDRS Emerging Mkt 50 ADR Index. Is there much of a difference between these?

I don't currently own any ETFs but feel like I should be researching them more...

Thanks,
Karen

 

[Spanky]

My choices seem to be: Vanguard Emerging Market VIPERS, iSHAREs MSCI Emerging Market Index, and BLDRS Emerging Mkt 50 ADR Index. Is there much of a difference between these?

Vangaurd has the lowest expense ratio. This would be my preference. The index tracked by each of these funds is different. EEM (IShare) tracks the MSCI emerging markets while VWO (Vanguard) tracks a modified MSCI with some of the "riskier" countries removed. Their return, however, are very similar. The BLDRS Emerging Mkt 50 ADR Index is not as broad as that of MSCI. If you are looking for a broad explosure, this fund would not a very good choice.

 

[kaudrey]

Thanks, Spanky! That helps a lot.