Popular low-risk investments in emerging markets

A note: Please kindly note that Cenoa does not provide investment, tax, legal or accounting advice; and this material has been prepared for informational purposes only. You should consult your own advisors before engaging in any transaction. You can find detailed disclaimers on Cenoa’s website. 

It can be challenging to get started investing anywhere in the world, but there are additional challenges when investing from an emerging market. Inflation, currency depreciation, political turmoil, and unstable banks can make it harder to get started. 

For all investment decisions, speak with a trusted financial advisor in your country to find out your options, to talk through your risk tolerance, and to make the right investment choices to help build your future.

Scott Graham // Unsplash

Low-risk investment options in emerging markets

Mutual funds

Mutual funds are collections of many stocks and bonds that an investor can buy as a group from a broker, making for a more diversified, lower-risk investment. If the value of one company within the mutual fund plummets, it will only impact a small fraction of your investment — whereas if you’d invested in that stock by itself, all of your investment capital would dwindle along with the value of that one company.

ETFs

ETFs, or Exchange-Traded Funds, are similar to mutual funds, but they can be bought and traded on a stock exchange just like a single stock. ETFs can contain stocks, commodities, and bonds. The price of an ETF fluctuates throughout the day and investors can buy or sell them at any time while the market is open. This is different from Mutual funds, which you can only buy and sell once trading hours have closed, limiting them to a single price on any given day. 

Both mutual funds and ETFs can focus on a particular industry or sector, or they can contain a little bit of everything — more on types of funds below.

Towfiqu Barbhuiya // Unsplash

Digital dollars

Digital dollars that are tied to the value of USD can be a good investment strategy for people in emerging markets. Simply add your funds to a super wallet like Cenoa, store your savings as digital dollars, and watch them grow with a high annual yield. E.g Cenoa currently offers 5% yield. Your funds will be protected from local currency inflation, and you can withdraw them at any time. 

Are mutual funds and ETFs available in emerging markets?

Often, yes! To get a sense of the types of funds available all over the world, check out this list of ETFs from Global X. To be sure, check with your local bank or financial advisor to learn more about investing in mutual funds or ETFs from your country. Also, note that international or global mutual funds are not the same as a fund based in your own country.

Types of mutual funds and ETFs to consider

Tech & startup funds

Startups can be risky investments, but there are technology and startup mutual funds that spread out your investment across a range of securities, reducing the risk of losses and increasing your chance at having a tiny investment in the next superstar company. 

Sustainable funds

For progressive, forward-looking investors, it’s important to know what your investment money is supporting. Younger investors are particularly interested in sustainable funds — two thirds of Gen Z investors say they’re “very concerned” about environmental and social issues. Sustainable mutual funds are groups of securities that, by certain metrics, don’t contribute to climate change or the destruction of the planet’s natural resources. 

Funds for emerging markets

Depending where you’re located, there will be a range of mutual funds available. Consult with a financial advisor or an investment broker that works in your country to learn about your options. 

Mutual funds & ETF alternative: Cenoa

Cenoa is a new way for investors in emerging markets to grow their wealth sustainably. It’s a DeFi super wallet with 5% yield that stores funds as digital dollars that are always on par with USD, meaning your savings will be safe from currency depreciation. Withdraw at any time, and enjoy a completely fee-free investment experience.