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I'm looking for a good emerging market fund that would be considered on the "conservative" end of the EM equity spectrum...any unique funds out there that have a lower volatility tilt?
In last month's Elevator Talk, Paul allows that he'll pursue for SFVLX some investments that are riskier than what would be appropriate in SFGIX.
If you want to limit downside, consider a fund that hedges its equity exposure. There are three possible hedges: a hybrid fund that holds bonds (often flagged "Total" or "Multi-asset"), a fund that's willing to hold a lot of cash, or a fund with a formal hedging policy. I screened for open, retail funds with the lowest downside deviation over the past five years. Here are 14 of the 15 "best" (the other was an institutional fund). Ten of the 14 have peer-beating returns over that period. Remember: these aren't recommendations, these are just a set of funds that meets one of your criteria that you might want to learn a bit more about.
David
GuideMark Emerging Markets GMLVX - 98% equity exposure Capital Group Emerging Markets Total Opportunities ETOPX - 45% equity Deutsche X-trackers MSCI Emerging Markets Hedged Equity ETF DBEM - hedged equity Harding Loevner Frontier Emerging Markets HLFMX -95% ICON Emerging Markets Fund ICARX - 88% New World Fund NEWFX - 84% Amana Developing World AMDWX - 87% AB Emerging Markets Multi-Asset ABYEX - 47% Fidelity Total Emerging Markets FTEMX - 63%, a Great Owl Lazard Emerging Markets Multi Asset EMMIX -47% Baron Emerging Markets BEXIX - 92% Calamos Evolving World Growth CNWIX -80% Seafarer Overseas Growth and Income Fund SIGIX - 90%, a Great Owl iShares Edge MSCI Min Vol Emerging Markets ETF EEMV - hedged equity
I'm looking for a good emerging market fund that would be considered on the "conservative" end of the EM equity spectrum...any unique funds out there that have a lower volatility tilt?
I vote for SFGIX, too. The other share-class is SIGIX. I checked-out my own holding, PRIDX, after reading your question. But it holds only 19.46% in EM. And it's a fund devoted to only small-caps, but worldwide. I like the fund.
I would second David's mention of NEWFX American Funds New World. It can invest in developed world companies that derive a significant portion of their reviews from the emerging markets, so it is not quite as volatile.
A frequently held view is that pairing a good EM equity fund such as SFGIX with an EM bond fund such as TGINX is a good conservative play for the EM space.
I own WAEMX, SFGIX and CIPDX. I'm quite done with Emerging markets. However I'm watching two emerging market funds carefully. ARTZX and ARTYX. I've always maintained ARTYX was only started because ARTZX couldn't get investors. So Artisan hires this bull market darling manager and I don't see ARTYX doing better than ARTZX yet. While it has garnered lot of assets, it has yet to outperform ARTZX for Artisan to merge it away into ARTYX.
I'm still betting ARTZX does better. If ARTYZ does better and ARTZX stinks I will shave my head. Even with luck of ARTYX not being fully invested at inception and fairing better out the gate, ARTZX has already caught up.
If EM volatility's an issue, there's always EM debt rather than equity.
Also, for those who own a chunk of Pimco multisectors, it's good to be aware that a slug of their assets are in Latin American and other EM debt, and have been for some time. My Pimco-heavy port, for example, gives me about 7% in direct EM exposure before I even think about an EM equity or dedicated EM bond fund.
I own WAEMX, SFGIX and CIPDX. I'm quite done with Emerging markets. However I'm watching two emerging market funds carefully. ARTZX and ARTYX. I've always maintained ARTYX was only started because ARTZX couldn't get investors. So Artisan hires this bull market darling manager and I don't see ARTYX doing better than ARTZX yet. While it has garnered lot of assets, it has yet to outperform ARTZX for Artisan to merge it away into ARTYX.
I'm still betting ARTZX does better. If ARTYZ does better and ARTZX stinks I will shave my head. Even with luck of ARTYX not being fully invested at inception and fairing better out the gate, ARTZX has already caught up.
You really need to look under the hood at ARTZX and ARTYX. The two are managed with a very different approach.
You really need to look under the hood at ARTZX and ARTYX. The two are managed with a very different approach.
I'm not saying they are managed same way or differently. That's not my point at all. My point is ARTZX was not marketable. ARTYZ became marketable because of ex-Thornburg manager who has not demonstrated how he will navigate a bad stock market. My contention is Thornburg, Brandywine, etc fund companies are all bull market darlings and ARTZX will fair better than ARTYX.
Finally, for all good the "different approach" is worth. Just look at the charts and you couldn't tell the funds apart.
Seafarer Overseas Gr & Inc would be my choice. Great management, concentrated portfolio, benchmark agnostic, focused on risk. It captures much of the EM upside with only about 70% of the downside. All the things you should look for in active management.
Seafarer G&I keeps coming up but it is closed to new investors. Same with Institutional shares. I just checked the website and talked to a rep. @DavidSnowball do any of the Matthews funds like Growth and Income or Dividend come close to your parameters above? I still own Matthews Growth and Income but I used about 30% to start an Sfgix position. I still like Matthews but I find Andrew Foster a more compelling manager.
Oops, I forgot that it's closed (SFGIX or SIGIX). As mentioned above, I'm in a different international fund, a TRP fund, which I'm happy with: PRIDX. Only about 20% of its portfolio is is in EM, though. from where I sit, that's my best shot. I would not recommend geographical sector-funds, like Africa or Latin America. You might want to check out the other fund run by Seafarer, the EM value fund. SFVLX. Not exactly the same mandate as the other, though.
For what it's worth, I was able to add SFGIX to a Vanguard IRA yesterday. I did not previously have a position in the fund at Vanguard. So it is still available to new investments on some platforms.
Comments
If you want to limit downside, consider a fund that hedges its equity exposure. There are three possible hedges: a hybrid fund that holds bonds (often flagged "Total" or "Multi-asset"), a fund that's willing to hold a lot of cash, or a fund with a formal hedging policy. I screened for open, retail funds with the lowest downside deviation over the past five years. Here are 14 of the 15 "best" (the other was an institutional fund). Ten of the 14 have peer-beating returns over that period. Remember: these aren't recommendations, these are just a set of funds that meets one of your criteria that you might want to learn a bit more about.
David
GuideMark Emerging Markets GMLVX - 98% equity exposure
Capital Group Emerging Markets Total Opportunities ETOPX - 45% equity
Deutsche X-trackers MSCI Emerging Markets Hedged Equity ETF DBEM - hedged equity
Harding Loevner Frontier Emerging Markets HLFMX -95%
ICON Emerging Markets Fund ICARX - 88%
New World Fund NEWFX - 84%
Amana Developing World AMDWX - 87%
AB Emerging Markets Multi-Asset ABYEX - 47%
Fidelity Total Emerging Markets FTEMX - 63%, a Great Owl
Lazard Emerging Markets Multi Asset EMMIX -47%
Baron Emerging Markets BEXIX - 92%
Calamos Evolving World Growth CNWIX -80%
Seafarer Overseas Growth and Income Fund SIGIX - 90%, a Great Owl
iShares Edge MSCI Min Vol Emerging Markets ETF EEMV - hedged equity
Now this ETOPX looks interesting, but $50K minimum.
I checked-out my own holding, PRIDX, after reading your question. But it holds only 19.46% in EM. And it's a fund devoted to only small-caps, but worldwide. I like the fund.
However I'm watching two emerging market funds carefully. ARTZX and ARTYX. I've always maintained ARTYX was only started because ARTZX couldn't get investors. So Artisan hires this bull market darling manager and I don't see ARTYX doing better than ARTZX yet. While it has garnered lot of assets, it has yet to outperform ARTZX for Artisan to merge it away into ARTYX.
I'm still betting ARTZX does better. If ARTYZ does better and ARTZX stinks I will shave my head. Even with luck of ARTYX not being fully invested at inception and fairing better out the gate, ARTZX has already caught up.
Also, for those who own a chunk of Pimco multisectors, it's good to be aware that a slug of their assets are in Latin American and other EM debt, and have been for some time. My Pimco-heavy port, for example, gives me about 7% in direct EM exposure before I even think about an EM equity or dedicated EM bond fund.
Regards,
Ted
Diversified Emerging Mkts:
http://money.usnews.com/funds/mutual-funds/rankings/diversified-emerging-mkts
Diversified Emerging Mkts ETFs:
http://money.usnews.com/funds/search?category=diversified-emerging-mkts
Finally, for all good the "different approach" is worth. Just look at the charts and you couldn't tell the funds apart.