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Updating The Thesis On Emerging Markets

davfordavfor
in Fund Discussions
Just a few thoughts about EM with a few fund suggestions. (I own MEGMX and TRECX in that area.) From the article:
Emerging Markets remain one of the best positioned areas of the market from a risk-return perspective.

EM debt and EM equity are likely gaining traction with investors from the falling dollar and large variance in valuation between them and the US.

Within EM debt, the analysis and decision making is much more difficult as currency choices need to be made.

What am I buying in EM equity?

Artisan Developing World Investor (ARTYX)
Emerging Markets Internet & E-Commerce ETD (EMQQ)
Templeton Emerging Markets (EMF)

What am I buying in EM debt?

MFS Emerging Markets Debt A (MEDAX)
Vanguard EM Bond (VEMBX)
TCW Emerging Markets (TGEIX)
Morgan Stanley EM Debt (MSD)
https://seekingalpha.com/article/4396512-updating-thesis-on-emerging-markets

Comments

  • BenWPBenWP
    edited December 2020
    Thanks, @davfor. I have upped my commitment to ARTYX. It's been a bit more volatile than MEGMX while outperforming it. To be sure, MEGMX is a new kid on the block and we won't know for some time how it plays out. I recently added XBUY for exposure to international e-commerce. Somewhere in EM funds' prospecti there must be mention of the risk of a government turning on its most successful entrepreneur, giving him and his shareholders a multi-billion dollar haircut. Such language would be purely speculative, would it not?
  • davfordavfor
    edited December 2020
    My MEGMX purchase was made in early May. I looked at ARTYX at that time but was wanted a fund that would be EM per my way of viewing things and had a hard time thinking of stocks like VISA, Netflix, and Nike as being EM stocks (M* lists ARTYX as currently being 28% US Equity).

    Here are a couple of links for MEGMX. It appears to clearly be a foreign stock fund:

    Fact Sheet

    11/30 Holdings

    Time will tell what impact the Chinese government's regulations updates will have on Alibaba, Tencent, and other internet-based companies. My suspicion is that the problems will get ironed out once the government is satisfied it has reasserted its control. But, the fund managers get paid to sort those problems out.
  • BenWPBenWP
    Very good point, @davfor, about « purity » of EM holdings. The Matthews fund appears to have only Heineken and Louis Vuitton as companies that are domiciled in developed countries. I note also that South Korea is well represented in the holdings. I think one or two indices have dropped SK from EM status. ARTYX does have a whiff of a global fund as opposed to a pure EM offering.
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