Tepper says the best way to make a play on emerging markets, while avoiding geopolitical pressure, is through the DGS emerging markets small cap dividend fund.
It’s a “great dividend play, it gives you some lower beta and at the same point in time these small-cap stocks are doing business locally, not internationally, so they wouldn’t be impacted by any trade issues whatsoever,” he said.
The DGS ETF is down 0.7 percent for the year, more than half the decline on the MSCI emerging markets ETF.
Larry McDonald, editor of the Bear Traps Report, has a different take on the bull case for emerging markets.
“With bond yields moving higher, there are a lot of losses around the country, around the world in bonds. Those assets have to move somewhere and they’re moving into commodities, commodity-producing countries,” McDonald said on Thursday’s “Trading Nation.” “About 30 percent of Brazil’s GDP is related to the commodity space, so from an economic standpoint, that’s a very big positive.”