How much does everyone have in EM? 0-25% or more? Has anyone elimated EAFA index/index huggers to their allocation. I am thinking about eliminating high debt/low birthrate EAFA mutual funds with EM/emerging Asia equity/bond funds. TRP EM bond/Stock. Small positions now but I am aiming for 15% equity and at least 10% bond. I am only 45yo but I think we "high-debt"nations are in trouble from a demographic standpoint. I do subscribe to Research Affiliate's ideas on these matters but am interested in others views. BTW I am planning on switching out Causeway INt Value for Matthews Growth and Income. Civvx is doing better YTD so I will feel like I am getting a bargain of 200 basis points.
Comments
46.52% of total portfolio is in PREMX
3.05% in MAINX
TOTAL: 49.57% in EM bonds. But let me also recommend, via Catch-22: FNMIX, at Fido. Its performance might be even better than PREMX, which lately has been on a tear.
There is another, single bond I own, maturing in July, 2013. When the proceeds get to me, I believe I'll be adding it to MAPOX, which is holding about 30% domestic, "safer" bonds in its portfolio. It pays quarterly, like MAINX. But PREMX pays monthly.
As for EM equities: do the Matthews funds count?
MAPIX: 35.31% of portf.
MACSX: 4.06%
So: 39.37% total.
MAPOX and MSCFX combined are 5.11% of portfolio.
"Break a leg."
Personally I like a balance of both EM equities and fixed income. As an example, EM Balanced Fund FEO is up nicely this year and so is EM Bond fund ESD. There are many other EM Bond funds as well.
With my Bond allocation - I have quite a bit in EM bonds. Note that Income funds such as Pimco Income Fund (PIMIX/PONDX) has recently upped their EM Bond allocation from the low single digits to double-digits now. Arnott's Asset Allocation funds also have a sizable chunk in EM bonds and Pimco's Diversified Income fund is now sitting around 40% in EM Bonds.
Global Bond funds from Hassenstab also hold a substantial amount in EM Bonds.
Another fund such as EHI - Western Asset Global High Income CEF also holds quite a bit in EM Bonds at around 35% these days.
My EM bond allocation as a portion of my bonds are quite substantial.
eq funds I'm using:
MACSX 5%
MSMLX 1%
ODVYX 1% new to me. continuing to DCA into
and em bonds:
FGBRX 4%
MAINX 1%
I continue to hold a few EM funds (Matthews, as well as the new AQR fund and a little DEM), as well as a handful of individual EM equities (such as a long-term holding in Asian conglomerate Jardine Matheson.)
One caveat to that and I wouldn't know if Fidelity has the same problem, the TRP search application called Gateway does not show ODVYX available to buy. I've found other funds I've purchased that do not show in their search as available funds. So I was lucky. Another fund that didn't show up in their Gateway search was the Templeton Global bond fund, but it was there for purchase as FGBRX and I bought it. For the heck of it, maybe you should try and place an order for ODVYX to see what happens. Maybe Fidelity's search is as screwed up as TRP.
Hi MikeM2 - hey, catchy name
We seem to be inundated with the message that developing markets are the place to be going forward, but that comes with much greater risk and volatility, which at my age is not worth it- at least not to me. That's why I stick mostly to less volatile funds like MACSX for my EM exposure, and I'm happy to have found ODVYX from BobC's posts. ODVYX has shown to be a less volatile EM fund then say PRMSX, which I was using for my EM fund in the past.
I'll stick with domestic funds for the bulk of my portfolio.
All three seem to have similar durations and yields in the same ballpark. TGWNX has the most corporates at about 54% followed by government issues at 27%. PEMDX has about the same percentage of corporates and government issues and DLENX has mostly corporate bonds.
At least by M*, TGWNX has the lowest ER at 0.99%, followed by DLENX at 1.20% and PEMDX at 1.25%.
Any thoughts on the best way to go?
Mona
(Dblex/Dlenx is my only dedicated EM debt fund; I have Dblex in an IRA. It appears to be the most conservative actively-managed EM bond fund around.)
However, as tempting as it looks, I'm wary of buying more EM debt right now, after looking at the bidding-up going on in EM bond CEFs. For example, TEI, the Templeton EM CEF, in the past 3 months has gone up in price by 8.75% and in NAV only 1.33%. The bandwagon may be getting a little crowded.
You noted: " For example, TEI, the Templeton EM CEF, in the past 3 months has gone up in price by 8.75% and in NAV only 1.33%. The bandwagon may be getting a little crowded."
An excellent point with which to view an investment area that has a comparable CEF. The numbers you noted may be a telling story, at least near term.
Thank you,
Catch
I quite agree!!! Let's hope. But I fear a bubble. People who are late to the party are jumping into EM div. payers and EM bonds with both feet, looking for profits. Belgium and Germany 2-year notes carry a NEGATIVE yield?! That's just NUTS. The USA isn't much better, re: Treasuries. So, when a pile of $ comes my way which I'm expecting, I will add to MAPOX the $1,000.00 which will max-out my allowable IRA deductible contributions for the year, at $6.000.00. With the remainder, I'm considering MWTRX. But it's really getting almost TOO big...