Russia, Czech Republic, Hungary, and Turkey are among the cheapest markets. Although a lot of fund managers/commentators believe more traditional emerging markets such as those in Asia have more room to run, they have had a run up and may longer be cheep, but "reasonable" (although China might still be considered cheap based on PE according to below link of chart from 9/30/2017...however China has had a good couple of months since then so maybe no longer cheap?).
I'm considering putting a small amount into either EUROX or TREMX. From 9/30/2017, EUROX top 6 country holdings are 34.5% Russia, 15.4% Turkey, 14.5% Poland, 7% Greece, 4.6% Austria, 3.3% Hungary (it should be noted that Morningstar last listed EUROX as having a turnover ratio of 164% so this could be different now). From 10/31/2017, TREMX has top 6 country holdings of 50.5% Russia, 15.6% Turkey, Poland 9%, Georgia 5.1%, Hungary 4.7%, and Romania 4.5%. My overall impression from reading fund reports is that the manager of TREMX is very valuation conscious, which is good if seeking emerging Europe as a value play away from other EM, however that has hurt TREMX in it's 2017 performance by being underweight Poland, which has had a great year. Valuation has also led to it's overweighting in Russia, taking up half of its portfolio. TREMX had a turnover of 48% compared to 164% for EUROX. TREMX is also more concentrated with 51 stocks, compared to 102 for EUROX according to Morningstar. ER of TREMX is 1.75%, EUROX is 2.33%, a difference to consider.
Any thoughts on investing in this region? Any opinions as to whether to invest in EUROX or TREMX? Are there any other Emerging Europe mutual funds (not ETFs) out there to consider?
http://www.starcapital.de/research/stockmarketvaluation
Comments
Both funds, Oct. 2000 to date:
http://stockcharts.com/freecharts/perf.php?TREMX,EUROX&n=4311&O=011000
Both funds, Jan. 2016 to date: both funds have had a decent run since Jan. 2016; is there may be more to be had??? If I were to invest in these areas, I would have to study more about the country holdings within the funds; as to economy, politics, etc. I.E.; Russia and energy, etc. for similar relative to a country. Turkey has political upheaval still in place. I recall Austria having severe banking problems after the market melt. I don't know the current status. Both funds have been flat to negative from Sept. 1. This is only an observation, as I don't know why this is the case......profit taking??? 'Course, the "markets" have caused fits for many since the market melt; and still cause head scratching, eh? "This time is different" is still in place, IMHO.
http://stockcharts.com/freecharts/perf.php?TREMX,EUROX&n=478&O=011000
I don't have recommendations for this area, as we are fully invested in other equity areas; and not a student of this particular area. For our own personal criteria; we tend to place no less than 5% into a given area to be meaningful for us and the overall portfolio.
Just my 2 cents worth on a Sunday morning.
Regards,
Catch
In reviewing my Xray analysis on my portfolio I have less than one percent in emerging Europe. I've been thinking for sometime that I should make an investment move to bring this up to about a full percent along with adding some to Africa and the Middle East as well.
I'm much like a car shopper ... Just kicking tires and looking.
Old_Skeet
@Catch22, these two funds have done well since Jan 2016, but still have slightly under performed the general EM category during that period. Moreover, they significantly underperformed the more traditional diversified EM category (mostly more negative) from 2013-2015, so it emerging Europe might have more catchup opportunity to make up for those years of greater negativity. From what I have read, emerging European countries seem to be putting it together for growing economies (especially Poland), but there are admittedly risks, as in Turkey as you described. I could just see if EM and the US become seen as expensive at some point in 2018, investors could turn to other investment opportunities that are less expensive, such as emerging Europe. I could be wrong of course, but that is just part of my thinking.
@Old_Skeet, one fund that might fit your bill could be FEMEX. I don't know if it is any good, but it hits the areas you are referring to.
Thanks for the tip to look at FEMEX. Yes, it will do to fill the void in my emerging market holdings as I am short in Emerging Europe along with Africa and the Middle East Regions from review of a recent Xray analysis of my portfolio. And, all this in one fund to boot. I'm thinking as the Region(s) come(s) more alive the fund's performance will pick up. The opportunity metrics look too good; and, I just gotta put some more money in this Region. At least a full percent (perhaps more) of my equity allocation.
Thanks again for the tip and posting your thoughts. Much appreciated.
Old_Skeet
http://www.investmentnews.com/article/20170429/FREE/170429921/is-it-time-to-go-international
Many also point out that diversification is not that good a motive, finally.
Regards,
Ted
https://www.google.com/search?q=Is+It+Time+to+Go+International+&cad=h
@MikeM,
Ted or someone has probably posted this one too, but I thought of your questions when I read it:
https://www.marketwatch.com/story/five-lessons-from-a-seasoned-fund-manager-who-knows-how-to-beat-the-stock-market-2017-11-28