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

Zweig: Emerging Markets Look Good, But Don’t Rush In

Funds are pouring into emerging market funds, with one-twelfth of total holdings having come in over the past 90 days, writes Jason Zweig of The Wall Street Journal. Presumably, he says, the heavy inflow is in “hot pursuit of high recent returns” (the asset class is up 12.4% this year). While participating in these funds is a good idea, Zweig says, investors should be careful not to rush in. “These stocks aren’t so much absolutely… Read More

Emerging Market Investor Picks for 2017

Bloomberg News offers a list of popular emerging markets for 2017 and the reasons why investors should be targeting them: Russia: The ruble is a “top bet” for investors that “borrow currencies with low interest rates and buy high yielding ones.” According to UBS Group AG, the ruble’s “carry trade” could potentially return 26 percent over the next 12 months. South Africa: Some investors see President Jacob Zuma’s power waning, which could lead to a… Read More

Arnott: Emerging Markets Hold Promise

Although EM stocks have taken a beating in recent years, things may be looking up, writes Validea CEO John Reese in this week’s TheStreet. Reese offers insight from Research Affiliate’s Rob Arnott, who thinks that, notwithstanding swelled valuations (based on Shiller PE ratios), “emerging-market stocks offer an attractive combination of depressed currencies, low valuations and strong momentum.” Using his guru-based stock screening models, Reese identifies the following five picks that could be poised for growth:… Read More

Pushing the Envelope Has Paid Off for Select Hedge Funds

On the whole, the past year hasn’t been great for hedge funds, but those who “ventured far afield” seemed to do better, according to a recent article in The Wall Street Journal. Specifically, the article says that some of the biggest profits materialized in “areas less frequently traded” including: Russia and Central Asia: One of the world’s biggest Russia-focused hedge fund firms, Moscow-based Prosperity Capital Management (approximately $3.3 billion in assets), reported a 57% gain… Read More

Rob Arnott is Pro-Emerging Market Investment

Countries don’t have to be great to see significant market growth, according to Research Affiliates’ CEO Rob Arnott as explained in a recent Investment News article. In fact, the article says, since Arnott first recommended emerging markets in January, the “average diversified markets fund has gained 7.8%, and 17.8% since the February low.” He believes the asset class offers “an unusual three-way combination of low valuations, depressed currencies and strong momentum.” Here’s how: Low valuations:… Read More

More Upside in International Stocks

The continued grind of the bull market may not be justified, according to an article in this week’s Investment News. In fact, the article, written by Joe Smith, senior market strategist at CLS Investments, argues the positive data points currently baked into the market—a dip in unemployment, improved corporate sales and earnings, additional consumer spending—don’t necessarily indicate a “positive view for investors in the U.S.” Domestic stocks, it asserts, look expensive compared to those overseas, and… Read More

Emerging Markets on The Rise

After a run of disappointing performance, emerging market stocks are perking up, says Validea CEO John Reese in a recent article for Nasdaq. Since January, this class of securities has gained more than 34% and the upward trend is expected to continue. Reese advises, however, that while the trend is a welcome change for yield-starved investors, investing in emerging markets should be based on the sort of fundamental business analysis inherent in our guru-based stock… Read More