How to invest in emerging markets

There is more than one way to invest in a foreign market. This guide explains the main routes and the terms you'll see across the site. It is educational — not advice.

Who is this for?

Two kinds of researcher: a US-based investor who wants to diversify abroad and is weighing which markets may outperform; and someone relocating overseas — perhaps for a golden visa or second passport — who needs to invest in, or understand, a specific country.

What is an emerging market?

An emerging market is an economy that is growing toward developed-world status but still carries higher political, currency and liquidity risk. Index providers such as MSCI and FTSE classify countries as developed, emerging or frontier; classifications differ and change over time.

Four ways to get exposure

From simplest to most hands-on:

1. US-traded ETFs

Buy a single-country or regional ETF in your normal brokerage account. Easiest access, instant diversification, but you pay an annual expense ratio and don't pick individual companies.

2. ADRs & cross-listings

Some foreign companies also trade in the US as American Depositary Receipts. You can buy these like any US stock, choosing specific companies without a foreign account.

3. Direct on the local exchange

Open access to the country's own exchange through a global broker (e.g. Interactive Brokers, Saxo) or a local broker. The widest choice of companies, but more paperwork, currency conversion and local rules.

4. Investment for residency

Some countries grant residency or citizenship in exchange for a qualifying investment (a 'golden visa'). The investment may be in real estate, a fund or a business rather than listed shares.

Glossary

Emerging market: A fast-developing economy with higher growth potential and higher risk than a developed market.
Market capitalisation: The total value of a company's shares (share price × shares outstanding). Used to rank company and market size.
ADR: American Depositary Receipt — a US-traded certificate representing shares in a foreign company.
ETF: Exchange-traded fund — a basket of securities that trades like a single stock.
Expense ratio: The annual fee a fund charges, as a percentage of assets. Lower is cheaper to hold.
Golden visa: A residency or citizenship route granted in exchange for a qualifying investment in a country.

This guide is general information, not personalised financial, tax, legal or immigration advice.