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Where To Find The Value in Emerging Markets

“Much of the shine has come off one of the dominant investor stories of the past two decades: emerging markets. Globalisation has gone into reverse, growth in goods trade never recovered after the financial crisis and, more recently, developed country politicians have been raising tariffs to try to keep jobs at home.”

Financial Times 2/11/2020

Comments

  • Emerging markets are popular again according to M*'s annual loved/un-loved report.
  • edited February 12
    I haven’t owned an EM equity fund since the early 90s (with one exception noted below)*. I’ve toyed with some EM bond funds (in and out) over the past 20 years. With advancing age I’ve decided to restrict that exposure to more diversified funds like DODLX, RPSIX which only dabble in EM bonds. Posted article from yesterday’s reading for the benefit of those who do invest in the EM segment. No idea if the guy knows what he’s talking about. But FT is a respected mainstream publication. And, I’d enjoy any takes EM investors might have on the author’s viewpoint.

    I scan TRP’s Historical Performance several times a year looking for sector funds off 30-50% or more over 3 years. Sometimes I gamble with a small spec stake. Last one that worked was their *Latin America fund (PRLAX) about 5 years ago. Sold after nice rebound. Since nothing looks very beaten up, I’m just sitting on my normal conservative allocation.
  • edited February 12
    Old_Skeet is double weight energy since it has been the lagging sector, within the S&P 500 Index, for the past five years. Plus, it kicks off a good dividend yield at about 7.5 percent for XLE. For me, that is a good contrarian and deep value play plus you are catching a nice dividend while awaiting the rebound.
  • From the article:
    Instead, emerging market investors need to look for the less obvious and the undervalued: countries with a specific story about why they, in particular, will do well out of the new world order.
    To that I say, good luck. How does any individual investor pick the area or country ready to "do well". Hell, mutual fund managers are all guessing at this quest.

    I go back and forth whether an EM fund is needed in a portfolio. You are really 'waiting' or that huge spike-up that, even when it comes, is just making up ground from falling behind US domestic funds. That being said, I do keep some money in Andrew Foster's fund, I guess for diversification and that what-if factor. Besides, his fund SFGIX is a relatively safe way to play EM's.

    @hank, I don't think you've missed anything by not investing since the 90's


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