{"id":21620,"date":"2026-05-27T23:56:00","date_gmt":"2026-05-27T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=21620"},"modified":"2026-05-28T22:10:20","modified_gmt":"2026-05-28T14:10:20","slug":"developing-countries","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/","title":{"rendered":"The pros and cons of investing in developing countries"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#What_is_a_developing_country\" >What is a developing country?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Market_size\" >Market size<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Market_return_in_developing_countries_and_major_countries\" >Market return in developing countries and major countries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Advantages_of_investing_in_developing_countries\" >Advantages of investing in developing countries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Disadvantages_of_investing_in_developing_countries\" >Disadvantages of investing in developing countries<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Well-known_developing_country_ETFs\" >Well-known developing country ETFs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/#Relative_articles\" >Relative articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_developing_country\"><\/span>What is a developing country?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Generally speaking, compared with developed countries, <a href=\"https:\/\/en.wikipedia.org\/wiki\/Developing_country\" target=\"_blank\" rel=\"noreferrer noopener\">developing countries<\/a> refer to countries with a lower level of economic and social development.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_size\"><\/span>Market size<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to data from fund research organization Morningstar Direct, there are currently 169 ETFs on developing country stocks available for fund investors to invest in, with total assets of approximately US$296 billion.<\/p>\n\n\n\n<p>The main reason to invest in developing country ETFs is to gain exposure to high-growth markets with rapidly growing middle-class consumers in China, India, Mexico, Taiwan, South Korea and Vietnam. Developing countries have a population of more than 4.3 billion, and their economic output accounts for about half of global GDP.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Market_return_in_developing_countries_and_major_countries\"><\/span>Market return in developing countries and major countries<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Country<\/td><td>Country&#8217;s large-cap index <\/td><td>Country&#8217;s average GDP growth (2013-2021)<\/td><td>Stock market returns in past 10 years<\/td><td>Stock market returns in past 20 years<\/td><td>Stock market returns in past 30 years<\/td><\/tr><tr><td>U.S.<\/td><td>S&amp;P 500 index<\/td><td>2.027%<\/td><td>125.35%<\/td><td>298.40%<\/td><td>893.56%<\/td><\/tr><tr><td>China<\/td><td>Shanghai Composite Index<\/td><td>6.556%<\/td><td>57.15%<\/td><td>123.93%<\/td><td>355.73%<\/td><\/tr><tr><td>Japan<\/td><td>Nikkei Index <\/td><td>0.473%<\/td><td>117.92%<\/td><td>185.37%<\/td><td>61.05%<\/td><\/tr><tr><td>Hong Kong<\/td><td>Seng Index<\/td><td>1.701%<\/td><td>-20.26%<\/td><td>51.45%<\/td><td>119.14%<\/td><\/tr><tr><td>India<\/td><td>Bombay Sensitive 30 Index <\/td><td>5.622%<\/td><td>156.81%<\/td><td>1221.29%<\/td><td>1486.42%<\/td><\/tr><tr><td>U.K.<\/td><td> FTSE 100 Index <\/td><td>1.488%<\/td><td>8.00%<\/td><td>65.91%<\/td><td>134.01%<\/td><\/tr><tr><td>Germany<\/td><td>DAX index<\/td><td>1.122%<\/td><td>59.99%<\/td><td>299.84%<\/td><td>666.27%<\/td><\/tr><tr><td>France<\/td><td>CAC 40 index<\/td><td>1.026%<\/td><td>64.24%<\/td><td>95.19%<\/td><td>272.79%<\/td><\/tr><tr><td>South Korea<\/td><td>Korea Composite Index <\/td><td>3.057%<\/td><td>26.00%<\/td><td>237.24%<\/td><td>32.51%<\/td><\/tr><tr><td>Taiwan<\/td><td>Taiwan Weighted Index <\/td><td>3.293%<\/td><td>75.48%<\/td><td>188.23%<\/td><td>146.73%<\/td><\/tr><tr><td>Singapore<\/td><td>Straits Times Index<\/td><td>3.131%<\/td><td>-6.41%<\/td><td>52.43%<\/td><td>40.62%<\/td><\/tr><tr><td>Brazil<\/td><td>Brazil Index<\/td><td>0.156%<\/td><td>107.81%<\/td><td>190.06%<\/td><td>599.81%<\/td><\/tr><tr><td>Indonesia<\/td><td>Jakarta Composite Index<\/td><td>4.151%<\/td><td>33.96%<\/td><td>784.34%<\/td><td>1388.51%<\/td><\/tr><tr><td>Vietnam<\/td><td>Ho Chi Minh Stock Market Index<\/td><td>5.829%<\/td><td>94.22%<\/td><td>366.47%<\/td><td>1031.48%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Table 1 &#8211; The performance of the world&#8217;s major stock markets in the past 30 years (backed by 7\/9\/2023, the stock market data comes from Google Finance and Yahoo Finance, and the stock market data of some developing countries that have not reached 30 years are expressed in 30 years; the GDP data comes from IMF)<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Advantages_of_investing_in_developing_countries\"><\/span>Advantages of investing in developing countries<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Developing countries are growing faster than developed countries, and this trend is not expected to change in the short term. The International Monetary Fund (IMF) predicts that real GDP in developed countries will grow by only 1.4% in 2024, due to inflation, monetary policy and other factors. In contrast, the IMF forecasts that real GDP growth in developing countries and developing economies will grow by 4.1% in 2024, led by countries such as India, which is projected to grow by 6.3%.<\/p>\n\n\n\n<p>Another incentive is the lower valuations of stocks in developing countries. Based on earnings for the past 12 months ended July 31, the S&amp;P 500 traded at 22.4 times earnings and 14.13 times earnings for the MSCI Emerging Market Index, which includes 25 countries. Stocks of the most liquid mid- to large-cap companies in developing countries.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disadvantages_of_investing_in_developing_countries\"><\/span>Disadvantages of investing in developing countries<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Developing country stock ETFs are more volatile than global ETFs that focus on developed country stocks. Over the past 10 years to July 31, 2023, the standard deviation of the MSCI Developing Countries Index was 16.2% higher than that of the MSCI World Index, which represents developed country stocks around the world.<\/p>\n\n\n\n<p>This happens because any sudden geopolitical event (such as the war in Ukraine) or any economic shock (such as a surge in inflation or a disruption in global supply chains) can ripple through countries that depend on commodity exports, tourism, and the health of advanced economies. Developing market economies.<\/p>\n\n\n\n<p>Stocks in developing countries also face risks from government influence and regulation. For example, the government may decide at any time to nationalize an industry or impose controls on an industry.<\/p>\n\n\n\n<p>Exchange rate changes are another risk factor that investors need to consider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Well-known_developing_country_ETFs\"><\/span>Well-known developing country ETFs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>MSCI Emerging Market Index: A developing country market index compiled by MSCI.<\/li>\n\n\n\n<li>iShares Core MSCI Emerging Markets ETF (ticker: IEMG): invests in a basket of emerging market countries around the world, with an asset size of US$72.1 billion.<\/li>\n\n\n\n<li>Franklin FTSE Latin America ETF (ticker: FLLA): invests in medium and large listed companies in Brazil, Chile, Colombia and Mexico, with an asset size of US$64.2 million.<\/li>\n\n\n\n<li>iShares MSCI Emerging Markets ex-China (ticker: EMXC). The fund&#8217;s main holdings are TSMC (ticker: TSM) and Samsung Electronics; its asset size is US$5.16 billion.<\/li>\n\n\n\n<li>Franklin FTSE Taiwan ETF (ticker: FLTW) invests in medium and large listed companies in Taiwan, with an asset size of US$175.8 million.<\/li>\n\n\n\n<li>VanEck Brazil Small-Cap ETF (BRF): It invests in small-cap stocks and has an asset size of US$34.2 million.<\/li>\n<\/ul>\n\n\n\n<p>According to Morningstar Direct data, as of August 29, the best-performing emerging market ETFs this year were VanEck Brazil Small-Cap ETF, SPDR S&amp;P Emerging Market Dividend ETF (ticker EDIV) and iShares MSCI Brazil Small-Cap ETF (ticker: EWZS), which is up 24.1% year to date and 5.7% over the past year.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"184\" height=\"93\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2023\/09\/Develop-Countries-1600x1200-1.jpg\" alt=\"developing countries\" class=\"wp-image-21627\"\/><figcaption class=\"wp-element-caption\">credit: Wiki<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Relative_articles\"><\/span>Relative articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2026\/05\/27\/developing-countries\/\">The pros and cons of investing in developing countries<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/15\/emerging-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why emerging market stock with high economic growth is not as rewarding as developed countries?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2025\/01\/21\/high-growth-country-market\/\">High growth country generally have poor stock returns<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/17\/global-stock-markets\/\">Global stock markets performance comparision over the past 30 years in a table<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/09\/04\/only-us-stocks-valuable\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why are only US stocks the most valuable for long-term investment?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/12\/20\/india-stock-tripled\/\" target=\"_blank\" rel=\"noreferrer noopener\">India stock tripled in three years to US$3.56 trillion, ranking fourth in the world<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/12\/india-stock-and-tech-giant\/\" target=\"_blank\" rel=\"noreferrer noopener\">Booming India stock market and the emerging Indian tech giants<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/?s=Indians+do+well+in+the+US%2C+India%E2%80%99s+weak+and+uncompetitive+industries\" target=\"_blank\" rel=\"noreferrer noopener\">Indians do well in the US, India\u2019s weak and uncompetitive industries<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/01\/japan-is-already-a-country-of-mediocrity-not-as-advanced-as-you-think\/\" target=\"_blank\" rel=\"noreferrer noopener\">Japan is already a country of mediocrity, not as advanced as you think<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/26\/south-koreas\/\" target=\"_blank\" rel=\"noreferrer noopener\">South Korea\u2019s emerging technology giant<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/04\/israeli-stock-market\/\" target=\"_blank\" rel=\"noreferrer noopener\">Israel stock market and tech giants<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/28\/sino-us-confrontation\/\">Will Sino-US confrontation, de-globalization, and de-dollarization affect the long-term investment value of US stocks?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/26\/gdp-and-stock-prices\/\">The relationship between GDP and stock prices<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/29\/us-gross-domestic-product-gdp-querier\/\">US Gross domestic product (GDP) querier<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/14\/china-and-us-gap\/\" target=\"_blank\" rel=\"noreferrer noopener\">The hardware and software gap between China and US, is all China-made software and hardware possible?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/25\/stock-worth-holding-forever\/\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 500 index, the only stock worth holding forever<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/04\/economic-and-forecasts\/\">How investors should look at economic trends and forecasts?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/11\/27\/currency-exchange-risk\/\">Should investors care about currency exchange risk when investing in US stocks?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/09\/29\/inflation-and-rate\/\">Tax, inflation and rate are the top three serious killers to investors<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Generally speaking, compared with developed countries, developing countries refer to countries with a lower level of economic and social development.<\/p>\n","protected":false},"author":1,"featured_media":21627,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45,1088,29,712,26,44,408,24,632,30,23,1080],"tags":[1093,1090,1092,1091,1094,1089,629,260],"class_list":["post-21620","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-etf","category-brazil-stock-market","category-china-stock-market","category-germany-stock-market","category-hong-kong-stock-market","category-index","category-india-stock-market","category-japan-stock-market","category-singapore-stock-market","category-south-korea-stock-market","category-taiwan-stock-market","category-uk-stock-market","tag-ediv","tag-emxc","tag-ewzs","tag-flla","tag-fltw","tag-iemg","tag-msci","tag-tsm"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/21620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=21620"}],"version-history":[{"count":10,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/21620\/revisions"}],"predecessor-version":[{"id":42426,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/21620\/revisions\/42426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/21627"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=21620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=21620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=21620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}