Slower Growth In The Emerging World

Despite being the long-term growth engines of global economy, the emerging markets seem to be slowing down. The purchasing managers' index, which is an indicator of the economic health of the manufacturing sector, has recently come out for a host of emerging nations and the numbers aren't so great. Russia, Turkey, Poland and the Czech Republic, all showed PMIs at or near their lowest points over the past 12 months. Global bank HSBC's Emerging Markets services and manufacturing index for the first quarter sank to 55 points, from the previous reading of 55.7. Overall service sector activity grew at a sub-par measure in the first quarter, with growth easing to a seven-quarter low. Chinese manufacturing growth slowed to a new six-month low. The main culprit; high inflation. Costs have reached their highest levels since the second quarter of 2008. According to HSBC, higher commodity prices, due to increased infrastructure investment, rising food prices and the global impact of America's ultra-loose monetary policy are the primary reasons for the slowed growth. The question remains whether or not this slow down will really undermine the developing world's economies. For investors, that could mean taking some of the iShares MSCI Emerging Markets Index (NYSE:

) or the Vanguard MSCI Emerging Markets ETF (NYSE:

) off the table and waiting for better prices. Alternatively, investors may want to park-and-wait in the dividend paying WisdomTree Emerging Markets Equity Income (NYSE:

). The ETF's dividends could help cushion any downside.