Swedroe on Factors in Emerging Market Stocks

In a recent article for ETF.com, BAM Alliance director of research Larry Swedroe outlines findings of an August 2018 study on factor-based investing titled, “The Cross-Section of Equity Returns in Emerging Markets.” Among the many findings of the study–which covers 27 emerging market countries for the period between 1988 and 2014—here are some highlights: Size, value and momentum anomalies are statistically significant using value-weighted portfolios; After controlling for company size, the book-to-market ratio and momentum… Read More

Emerging Markets Reflect Investor Fear

Emerging market stocks are “taking the brunt of investors’ fears,” writes Nir Kaissar in a Bloomberg article last month, noting a drop in the MSCI Emerging Markets Index on a year-to-date basis against S&P 500 gains. Bloomberg conducted a survey of 20 investors, traders and strategists regarding what they think are the biggest drivers for EM. The top responses included: Fed rate outlook, trade conflicts, EM central bank outlook, China, oil and commodity prices, and local… Read More

Co-Manager of Bond Fund with 8% Returns Shares Market Insights

Although emerging bond funds have hit a rough patch, many EM economies are in a growth spurt, “supported by healthy demand for commodities and other exports in end market such as Europe.” This according to an article in Barron’s. The article quotes co-manager of the TCW Emerging Markets Income fund Penelope Foley, who says that even if rising rates pressure prices, bond yields for dollar-based debt average around 6%. The upshot, she says, “should be… Read More

Swedroe on Active Management in Emerging Markets

In a recent article in ETF.com, BAM Alliance director of research Larry Swedroe debates claims that active management is the “winning strategy” in emerging markets. Citing SPIVA and Morningstar data as well as academic research, Swedroe makes the case that, “at least for investors who do not have access to institutional EM funds, active management is a loser’s game.” For example, writes Swedroe, SPIVA data shows that for the last 5-, 10- and 15-year periods,… Read More

Emerging Markets in Tough Spot, Says Harvard Professor Reinhart

The investment opportunity many see in emerging markets is being called into question by Cuban-born economist and Harvard professor Carmen Reinhart. This according to a recent Bloomberg article. Reinhart cites debt, weakening trade terms, rising interest rates and slow growth as reasons for concern, arguing that developing nations are in fact worse off than during the 2008 global financial crisis. He makes the following points: The more tightening by the Fed, “the more the anticipation… Read More

Société Generale Strategist Favors Emerging Markets

“Money managers should think twice before letting a bumpy month of losses scare them away from emerging markets,” according to a recent Bloomberg article. The article cites comments from Société Generale cross-assets strategist Bruno Braizinha, who argues that developing countries are “better suited to withstand a global downturn than in the past,” and that any upcoming U.S. recession would be less severe than the global financial crisis in 2008. Emerging market fundamentals are, he says,… Read More

Templeton’s Mark Mobius to Retire

Mark Mobius, long considered an emerging markets guru, will retire from Templeton investments at the end of this month, according to a recent article in The Wall Street Journal. Mobius joined Templeton in 1987 to launch one of the first funds dedicated to emerging markets, the article says, adding that “his star rose during an ensuing bull market.” He became what the article describes as one of the best known “evangelists for investing in Asia… Read More

Bank of America Merrill Lynch says Emerging Market Bull Run is Underway

Based on its analysis of bull markets since 1976, Bank of America Merrill Lynch says that geopolitical factors, central bank policies and a focus on company earnings are all “distractions” when it comes to “riding bull markets in emerging stocks.” This according to a recent article in Bloomberg. Analysts at the firm have asserted that emerging shares could double in two years and that an overweight is warranted, the article says, even though some investors… Read More

Relatively Calm Emerging Markets Attracting Investors

Emerging markets—long considered turbulent–are seeing the lowest volatility they have in three years, which is attracting funds and bolstering returns. This according to a recent article in The Wall Street Journal. The MSCI Emerging Markets Index is up 25% over the past 12 months, the article reports, compared with a 15% return for the S&P 500. It attributes the flow in part to the fact that valuations haven’t risen as much as they have in… Read More

Gundlach Says Go Long Emerging Markets

Despite conventional wisdom that says rising U.S. rates will strengthen the dollar, Doubleline Capital chief investment officer Jeffrey Gundlach recommends going short on the S&P 500 and long on emerging market stocks, according to a recent Bloomberg article. At the Sohn Investment Conference earlier this month, Gundlach quipped, “What the heck, let’s have some fun.” In a CNBC interview, Gundlach explained he isn’t predicting that the S&P 500 will fall, but suggested that “this year’s bet… Read More