7. MSCI emerging markets

Over the past 20 or so years, returns from this index have been spectacular, even after the mauling of 2007-09. For investors looking to access this extraordinary growth, the best choice is the simplest: a fund that either tracks or benchmarks the MSCI EM index. All the big ETFs that track the global MSCI EM space are cheap, fairly diversified across different countries – although resources do tend to figure heavily – and biased towards the biggest and best companies in the global emerging markets space. These diversified funds are probably a better idea compared with any of the more country or region specific indices or funds, although particularly adventurous types might want to consider some interesting alternatives that focus on emerging markets small caps – they're still part of the MSCI index family and tracked in turn by iShares ETFs. The first is called the MSCI Asia ex Japan Small Cap index – it's hugely diversified on a number of levels, with a great variety of nations and different sectors (Taiwan 29 per cent, South Korea 22 per cent, Hong Kong 13 per cent and China 12 per cent, with financials, industrials and technology all fairly evenly represented). There's also the MSCI Emerging Markets Small Cap index which is defined as any company within the MSCI EM index with a market capitalisation of between $200m and $1.5bn. This little known index started in 1998 and by its peak in 2007 had quadrupled in value. But in the bear market of 2007-08, the index crashed back in value but it's still well ahead of its starting levels in 1998.

More adventurous investors might also want to look at the small number of BRIC indices – these track the markets in Brazil, Russia, India and China – with the FTSE variant focusing on the 50 largest companies in the developing world (it includes companies such as Petrobas in Brazil and Gazprom in Russia).

Emerging markets ETF Funds