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

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