• Elon Musk has achieved incredible wealth that may seem impossible to average investors.
  • But, as Nicholas Vardy explains today, there is an investment strategy that’s enjoying excellent returns and poised to take off in the future.

It seems that Elon Musk is always in the news.

Even as the U.S. suffers from the COVID-19 pandemic, race riots and tens of millions unemployed, Musk has just collected Tesla (Nasdaq: TSLA) options worth up to $770 million.

It was Musk’s reward for achieving some of Tesla’s operational goals…

And – most importantly – keeping the market value of Tesla at more than $100 billion over the past six months.

Nice work if you can get it.

Musk fascinates the American public. That’s because, in the investment world, Musk is as divisive as Donald Trump is in the political world.

Musk and Trump have a lot in common.

Musk’s fans believe that he is humanity’s last and greatest hope. Trump supporters believe that the president plays a similar role in the United States.

Both are showmen prone to exaggeration. Both are like Teflon when it comes to political and financial scandals. Nothing ever sticks.

Finally, both have used their larger-than-life personas to generate billion-dollar fortunes.

Alas, we mortals must focus on less glamorous ways of making money.

Yet, thanks to the surprising U.S. stock market rally, investors are doing just that.

But what if I told you there was another set of financial markets trouncing the returns of the U.S. stock market?

If history is any guide, these markets will continue to outperform over the next six months.

Let me explain…

Emerging Markets: The Redheaded Stepchild of Investing

It may be hard to believe…

But between 2003 and 2007, emerging markets were the top-performing asset class in the world.

Consecutive annual returns of 55.8%, 25.6%, 34.0%, 32.2% and 39.4% over those five years were enough to turn a $10,000 investment into $48,304.

The contrast with today could hardly be greater.

Emerging markets have lagged the U.S. markets badly since then.

If you’re an average U.S. investor, you probably hate emerging market stocks.

And with all that is going on in the world, emerging markets may be the last place in the world you’d want to put your money at risk.

But here’s why you might be very wrong…

Much like risky bets on biotechnology, emerging markets are a boom or bust asset class. If the mood is right, investors pile in and drive stock prices sky-high.

When emerging market stocks do enter a bull market, they’ll do so in a big way. And the recent action in emerging markets suggests they may be on the verge of doing just that.

SentimenTrader recently highlighted the remarkable technical strength of emerging market stocks.

The iShares MSCI Emerging Markets ETF (NYSE: EEM) has put together its fourth straight session with a more than 1.7% gain.

This performance is the iShares Emerging Markets ETF’s longest streak of winning days ever since its inception in 2003.

The other five times it put together streaks of at least three days, it averaged an impressive 13.6% return two months later. Six months later, the average return soared to a whopping 29.9%.

How to Ride the Emerging Markets Bull

With the explosion of ETFs, you have many more ways to ride the emerging markets bull than you did in the last bull run.

First, you can invest in a broad-based emerging markets ETF like the iShares Emerging Markets ETF.

But if you believe we’re in a bull market, why not swing for the fences?

The best way to do that is with a leveraged emerging markets ETF.

The ProShares Ultra MSCI Emerging Markets ETF (NYSE: EET) delivers double the daily performance of the MSCI Emerging Markets Index.

The Direxion Daily MSCI Emerging Markets Bull 3X Shares ETF (NYSE: EDC) is a triple-leveraged version of the MSCI Emerging Markets Index.

Just make sure you have the stomach for volatility.

Second, you can drill down and invest in specific countries and sectors.

The table below highlights the 10 best-performing emerging markets ETFs of the past month, through June 2.

Performing Emerging Markets ETFs

Yes, the list includes the leveraged emerging markets ETFs I mention above.

But it also includes Brazilian, Russian and Chinese internet ETFs that have been big winners in the past month.

Time your investment right in one of these leveraged ETFs, and you set yourself up for a year of monster returns.

So will emerging markets make you as wealthy as Elon Musk?

No, they won’t.

But if history is any guide, investing in emerging markets ETFs between now and the end of the year will get you a lot closer.