Investors looking to take a punt on emerging markets may find exchange-traded funds a convenient way to invest in otherwise inaccessible parts of the world. But buyer beware. ETFs are no panacea for the volatility and heightened risks that characterise developing markets.

Emerging markets focused ETFs have become a big business. Whereas 10 years ago $700m was invested in just eight emerging market ETFs. By April this year, this figure had mushroomed to more than $248bn spread across nearly 600 ETFs, according to asset manager BlackRock. Such is the popularity of the emerging market ETF, it now rivals the traditional actively-managed mutual fund as the primary route for investing in developing countries. ETFs have attracted more net new assets in each of the past two years than active emerging market funds, according to Deutsche Bank, with assets up by 250%.