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Very happy with Seafarer(SFGIX) but any other suggestions
I would like to diversify my emerging markets investments. Right now I have SEAFARER SFGIX and it is doing well. Which other EM funds have worked out well to add additional investment? Print
Smoking out the right way to invest in the marijuana movement Advisers keeping their distance from high-flying pot stocks
By Jeff Benjamin | April 11, 2016 - 1:20 pm EST InvestmentNews Meanwhile, it is easy to understand how some could get caught up in the pot-investing buzz.
There are literally dozens of cannabis-related companies already trading over the counter, and many of them share similarly volatile stock-price histories.
“It seems clear that cannabis is on the way to becoming legal across the country, either for medical or recreational use,” said Chris Chen, a wealth strategist at Insight Financial Strategists.
“However, given that there are still a number of legal uncertainties regarding cannabis, an investment in that field would be classified as aggressive,”
@prinx, I'm a fan of Grandeur Peak but their emerging markets fund is hard closed and who knows when it will open again. I think SFGIX is a great fund but if you're looking for alternatives I'd suggest doing some research on DRESX or MEASX to see if they add anything for you.
If you don't mind new and thinly traded, I've been happy with ROAM since I purchased it. I hold a much larger stake in Seafarer but wanted an ETF to pair it with.
I agree with the folks: there aren't many better options than Seafarer. You might imagine Mr. Foster's mantra as "safe and sane." If you wanted more of the same, you might consider DRESX, which offers hedged exposure to EM small caps, or FTEMX, which mixes EM stocks and bonds. If you wanted to go in the other direction and look for a (small!) position on the wild side, then I'd consider specialists in small companies, small countries and/or frontier economies.
In my case, I have positions in SFGIX, MACSX and MAINX in my non-retirement portfolio and FTEMX in my retirement one.
"If you wanted more of the same, you might consider DRESX, which offers hedged exposure to EM small caps" Are we really comparing DRESX to SFGIX? The two are not similar at all...
Because risk moderation is generally tax-inefficient and for some of the asset classes that interest me (Asia income, for example) there aren't any tax-efficient vehicles. You could try to invest in low-beta stocks and a low-turnover fund, but that's sort of working at the edges of risk reduction.
So I keep good records, absorb the tax hit now and might book a taxable loss (as in the case of Artisan Small Cap Value) when I eventually sell.
Because risk moderation is generally tax-inefficient and for some of the asset classes that interest me (Asia income, for example) there aren't any tax-efficient vehicles. You could try to invest in low-beta stocks and a low-turnover fund, but that's sort of working at the edges of risk reduction.
So I keep good records, absorb the tax hit now and might book a taxable loss (as in the case of Artisan Small Cap Value) when I eventually sell.
Cheers,
David
Hi David,
Thanks for the explanation and I understand the choices.
I too have been hurt by the likes of Artisan (ARTMX) in the past few years with a poor returns and a big tax bill (on the way for the same in 2016), so I have mostly gravitated to Index and muni bond funds in my non-retirement account.
I certainly am not saying ARTMX offers any risk moderation (just the opposite high SD) like SFGIX and MACSX, but I have become very shy about putting any more actively managed funds in my non-retirement account. And the dilemma is, my non-retirement account is larger than my retirement account. I fill up my retirement account with other tax-inefficient funds (PIMIX, DBLTX, MACSX, PTIAX, VWEAX and one or two others), but the point is I have less room and have become conscious of asset location.
So now in some ways I let the tax tail wag the dog, but I sleep better if I continue to build my non-retirement account with funds that are tax-efficient, with a low ER and give me market returns.
I have owned ARTMX since 2006 in my non-retirement account, reinvested dividends each year (except last year), and like you did with ARTVX, I just need to bring myself to cutting the cord and before the November capital gain distribution.
SFGIX is currently the most attractive actively managed EM equity fund. But to avoid manager risk over the next 10-20 years with the additional kicker of a significant cost advantage, I would favor the inexpensive EEMV (0.25% ER vs. 1.15% net ER for SFGIX). FWIW, the index for this ETF has backtested very well:
Also, even though SFGIX has outperformed EEMV since its inception on 2/15/2012, I have more confidence in the much longer backtested data since 2002 for the underlying index of EEMV.
As always, I agree with Ted that investors need only one EM equity fund. If, by chance, you are a fiddler or optimizer, as I am, I would consider adding one country-specific EM ETF which is particularly undervalued to either SFGIX or EEMV. That ETF would be RSX according to this site that I monitor regularly:
I chose Seafarer (SFGIX), but in my 401(k), Capital Emerging Markets Growth Fund (EMRGX) chose me, as the plan swapped out American's (NEWFX), for Capital's (EMRGX), which has a lower (.80) ER.
On paper, the EMRGX managers look to have more experience than nearly any foreign/emerging markets operation - its partners have in the range of 15-to-40-years. Apparently, they were "chosen by the International Finance Corporation, a World Bank affiliate, to manage the world’s first global emerging-market fund."
But their long-term results (and the emerging markets category) are uninspiring. If those markets ever catch a sustained rally, I would expect EMRGX to be rewarded for the risk - a la GMO's forecast on a mean reversion for the category.
Right or wrong, I consider such exposure a diversifier, without getting crazy with more esoteric, alternative options.
Comments
Smoking out the right way to invest in the marijuana movement
Advisers keeping their distance from high-flying pot stocks
By Jeff Benjamin | April 11, 2016 - 1:20 pm EST
InvestmentNews
Meanwhile, it is easy to understand how some could get caught up in the pot-investing buzz.
There are literally dozens of cannabis-related companies already trading over the counter, and many of them share similarly volatile stock-price histories.
“It seems clear that cannabis is on the way to becoming legal across the country, either for medical or recreational use,” said Chris Chen, a wealth strategist at Insight Financial Strategists.
“However, given that there are still a number of legal uncertainties regarding cannabis, an investment in that field would be classified as aggressive,”
http://www.investmentnews.com/article/20160411/FREE/160419993?template=printart
Regards,
Ted
In my case, I have positions in SFGIX, MACSX and MAINX in my non-retirement portfolio and FTEMX in my retirement one.
For what that's worth,
David
Hi David,
Why relatively tax-inefficient funds in your non-retirement portfolio?
Mona
@Ted & @Charles- yes, fine, as long as you choose SFGIX and not WAFMX.
Because risk moderation is generally tax-inefficient and for some of the asset classes that interest me (Asia income, for example) there aren't any tax-efficient vehicles. You could try to invest in low-beta stocks and a low-turnover fund, but that's sort of working at the edges of risk reduction.
So I keep good records, absorb the tax hit now and might book a taxable loss (as in the case of Artisan Small Cap Value) when I eventually sell.
Cheers,
David
Hi David,
Thanks for the explanation and I understand the choices.
I too have been hurt by the likes of Artisan (ARTMX) in the past few years with a poor returns and a big tax bill (on the way for the same in 2016), so I have mostly gravitated to Index and muni bond funds in my non-retirement account.
I certainly am not saying ARTMX offers any risk moderation (just the opposite high SD) like SFGIX and MACSX, but I have become very shy about putting any more actively managed funds in my non-retirement account. And the dilemma is, my non-retirement account is larger than my retirement account. I fill up my retirement account with other tax-inefficient funds (PIMIX, DBLTX, MACSX, PTIAX, VWEAX and one or two others), but the point is I have less room and have become conscious of asset location.
So now in some ways I let the tax tail wag the dog, but I sleep better if I continue to build my non-retirement account with funds that are tax-efficient, with a low ER and give me market returns.
I have owned ARTMX since 2006 in my non-retirement account, reinvested dividends each year (except last year), and like you did with ARTVX, I just need to bring myself to cutting the cord and before the November capital gain distribution.
Best Regards,
Mona
SFGIX is currently the most attractive actively managed EM equity fund. But to avoid manager risk over the next 10-20 years with the additional kicker of a significant cost advantage, I would favor the inexpensive EEMV (0.25% ER vs. 1.15% net ER for SFGIX). FWIW, the index for this ETF has backtested very well:
Backtest Data EEMV
Also, even though SFGIX has outperformed EEMV since its inception on 2/15/2012, I have more confidence in the much longer backtested data since 2002 for the underlying index of EEMV.
As always, I agree with Ted that investors need only one EM equity fund. If, by chance, you are a fiddler or optimizer, as I am, I would consider adding one country-specific EM ETF which is particularly undervalued to either SFGIX or EEMV. That ETF would be RSX according to this site that I monitor regularly:
http://www.gurufocus.com/global-market-valuation.php
Kevin
On paper, the EMRGX managers look to have more experience than nearly any foreign/emerging markets operation - its partners have in the range of 15-to-40-years. Apparently, they were "chosen by the International Finance Corporation, a World Bank affiliate, to manage the world’s first global emerging-market fund."
But their long-term results (and the emerging markets category) are uninspiring. If those markets ever catch a sustained rally, I would expect EMRGX to be rewarded for the risk - a la GMO's forecast on a mean reversion for the category.
Right or wrong, I consider such exposure a diversifier, without getting crazy with more esoteric, alternative options.