Nervous About US Stocks? Check Out Emerging Markets

As more nervousness creeps into the US stock market, investors are sharpening their look at overseas opportunities where growth is outpacing the US recovery.

While emerging and developed markets have largely kept pace with the US rally over the past seven months, there's growing belief that the two may diverge as the US faces an extended slow-growth period.

Consequently, advisors are making sure their clients are committing at least 20 percent of their portfolios to foreign markets, with about a quarter of that devoted to emerging markets.

"We think international should be a material component in portfolios. It's important for diversification," says Beth Larson, principal at Evermay Wealth Management in Washington, D.C. "It probably should be a larger component than many individual clients think it should be."

Investors looking for foreign exposure are turning to the swelling numbers of exchange-traded funds dedicated to those markets.

The funds are divided into several categories and allow investing in foreign markets as a whole, specific countries within the group, and particular sector plays that are focused on international markets. Emerging markets—China, India, Brazil and a slew of others—make up a significant and increasingly popular component within the foreign market group.

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