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In Emerging Markets, A Time To Be Especially Choosy
One thing for sure the EM space is very different from say 5 years ago. This year is a good example where active management has benefited from stock picking and country allocation relative to the respective EM benchmark.
Reply to @Sven: Yeah but I would say that most that are doing better than the EM index YTD are only doing a tiny bit better so far this year. For example - an EM fund that a lot of investors have liked over the past 5+ years has been the T. Rowe Price EM Fund (PRMSX). PRMSX is doing better than the Vanguard EM Index by approx. 3/4 of a percent YTD --- that's what I call barely doing any better.
Another highly rated EM fund is the Virtus EM Fund but this one is doing worse than the EM index YTD.
And then some of these EM funds are massively way bigger (10-20x) than they were 10 years ago and so they may not be as nimble as before.
Having said that I am invested in the Seafarer fund.
Concluding statement: "Japan's efforts to reflate its economy could spill over to emerging Asian economies through expanded bank lending, portfolio rebalancing, and increased outward foreign direct investment..."
"...One surprising reason for that may be the ebbing influence of the U.S. even as the median forecasts of economists surveyed by Bloomberg News point to expansions of 2.7 percent in 2014 and 3 percent in 2015, up from 1.6 percent this year..." I've been seeing and saying this for decades.
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Another highly rated EM fund is the Virtus EM Fund but this one is doing worse than the EM index YTD.
And then some of these EM funds are massively way bigger (10-20x) than they were 10 years ago and so they may not be as nimble as before.
Having said that I am invested in the Seafarer fund.
http://finance.yahoo.com/news/world-bank-cuts-china-east-030215024.html
I've been seeing and saying this for decades.
http://www.bloomberg.com/news/2013-10-06/new-american-economy-leaves-behind-world-consumer-of-last-resort.html