Has anyone ever considered this? Is anyone doing this now? If you are doing it now are you retired or not?
EM valuations are attractive but outperformance is lumpy.
My EM is Seafarer G/I(which came to my attention on these boards,THNX), Matthews G/I. I have a slug of American funds that I am considering deploying to AF New World which buys EM stocks or stocks that obtain a significant amount of earnings from EM markets(small slug of EM bonds too).
This would make my EM 15% of the portfolio. I realize that the G/I funds are not pure EM but they lean that way.
Regards,
MikeM2
Comments
I'll be rebalancing my portfolio towards the last part of March or first part of April. In this process I've been thinking of moving my commodity strategy fund PCLAX to my hybrid income sleeve since it pays a strong quarterly dividend (TTM 16%). This should provide an open to buy in the growth area where I can add a micro cap fund. I've been looking at WMMAX. Hopefully, within my growth and income area with quarterly dividends being paid this month will also provide some open to buy room to add to my DWGAX position which I'll fund from portfolio dividend income.
I'm not of the camp to make emerging markets my sole foreign exposure.
Of roughly 500 diversified foreign funds (i.e. foreign large or small cap; value, blend, or growth) in M*'s online database, a little over 1/3 fall into the 10% to 25% EM range. So while these funds are not rare, one may need to seek them out. (Add in funds having even higher EM exposure and the total percentage rises to around 2/5 of foreign funds.)
Do you know SFGIX, though called an EM fund, is 50:50 Developed and EM markets (per M*)? NEWFX is 55% Developed, 45% EM. DWGAX 38% Developed market. If you look at an "International fund like DODFX, they have 20% in EM.
I guess where I'm going with that, many of these foreign funds are a mix of Developed and EM countries and their managers know more than me or you (well, me anyway). You have to dig into a funds portfolio to be pure one or the other. Maybe just leave it up to the EM fund manager to decide.
In small cap, PRIDX has been quite reliable though it is closed now. In looking for alternatives, GISYX popped up. It's from a fund family that's popular here, and this particular fund is reasonably priced both for the family and for a mid cap int'l fund. Not concentrated and low turnover.
On the value side of small/mid cap is QUSIX. This fund is one I've been aware of for some time, but I didn't realize that the institutional share class could be purchased by retail investors (e.g. in Fidelity IRAs). The retail share class costs 1/3% more.
Another fund in the same space, and somewhat of a surprise to me, is FISMX. It's a surprise because I'd generally given up on Fidelity a decade or more ago. But this is a moderately small sized fund for Fidelity ($1.2B), very diversified (as one would hope for a small cap fund with over $1B AUM), low turnover, reasonable cost.
These are just funds that interest me because they're well diversified (including EM, which was the subject of the thread), reasonably well performing, low turnover, and low to moderate cost. With the exception of PRIDX, one can open a position in any of them with a low minimum (though one may have to work at it).