Every once in a while, I like to highlight a recommendation that I am making in one of my paid services to showcase a broad market trend that is worth bringing to your attention. While the U.S. stock market has been picking up recently, the emerging markets really have been climbing.

To take advantage of the fast-growing emerging markets, I recommended to subscribers of my Successful Investing advisory service that they buy the iShares MSCI Emerging Markets Index (EEM). I am pleased to report that the position is up nicely over the past six weeks since we recommended it.

One word of caution is that emerging markets generally rise faster than traditional markets, but they also tend to drop quicker. This kind of volatility can be unnerving, so only invest money that you are comfortable putting at risk. However, the potential reward is that emerging markets have been shown to produce bigger gains over an extended period of time than the markets of developed countries.

Another risk is that the market’s recent climb, coupled with fast-rising bullishness in the latest American Association of Individual Investors Sentiment Survey, suggests to me that a bit of a pullback could be triggered soon if unexpected bad news hurts growing investor confidence. If you are risk averse, you may want to watch for a market retreat before considering investing in EEM.

For those willing to assume the risks, EEM offers a way to tap the emerging markets with a single investment. At the end of August, the fund had a one-year return of 19.11%. Its volatile nature is reflected by annualized returns of negative 2.76% over the past three years, and a profit of 11.59% over the past five years. The performance shows that investors who weathered the market plunge during the fall of 2008 would have profited nicely if they had held the position for the past five years. Of course, my technical-trading approach of tracking the market’s moving averages to determine when to enter and exit is intended to move subscribers into non-equity investments when conditions warrant -- and more importantly, bring subscribers back into equities when the path to profitability opens up again.

Here’s a brief description of EEM to help you understand the fund’s holdings. The largest sector that it owned, as of Aug. 31, was financials, consisting of 25.1% of the portfolio, followed by materials, 13.72%; energy, 13.65%; information technology, 12.94%; telecommunication services, 8.57%; and industrials, 7.05%. The countries where EEM invests the bulk of its money were: China, 18.36%; Brazil, 15.91%; South Korea, 13.09%; and Taiwan, 10.46%. As of the same date, the largest company holdings were: Samsung Electric-GDR, 2.39%; China Mobile Ltd., 1.87%; OAO Gazprom-REG S ADS, 1.65%; Petroleo Brasileiro S.A.-ADR, 1.59%; and Banco Itau Holding Financeira SA-ADR, 1.54%.

If you want advice from me about which ETFs to buy and to sell, I encourage you to sign up for my ETF Trader service by clicking here. As always, I am pleased to answer any of your questions about ETFs, so please do not hesitate to contact me if you have one. To send your question to me, click here. You may see your question answered in a future ETF Talk.