Some questions on Emerging market funds ?

newgirl

I am trying to make a choice on a new Emerging market position . I need some clarifications?
1.FSEAX -looks amazing, The Martin Ratio/ MaxDD and recovery - and the performance SCHWAB SUMMARY STATES EX JAPAN - But in the country allocation detail it shows an 85 position in Japan
2. Is SIGIX and PRIJX recent performance lackluster solely due to the Value proposition, and is that a great reason to invest there at this time ?
3. per David's recent comments and Theresa Kongs comments about EM Bonds ( I don't have any ) would a position in FTEMX/FTDEX - (20 % BONDS ) be a timely move.
4, I haves dry powder in both taxable and un taxable accounts ready to invest - currently very heavy large Caps US- so looking to diversify into Foreign Small caps and EM . I have already started ne position in MFAIX - Looking at lower risk way to add the higher risk EM to my portfolio.

Many thanks !

ron

EMQQ I attended a meeting about 2 years ago and bought it. Glad I did, it took about a year and is well placed.

Crash

SIGIX (SFGIX) was a disappointment to me. Not a disaster, but I did get out of it. After Foster left Matthews, I went over to his new fund. He is a good communicator, but eventually, I tired of him admitting to mis-timed decisions or just bad investments in particular stocks. But the fund had quite a good 2020.

FSEAX had a partial change in management of the fund at the end of 2019 or maybe just into January, 2020. The fund really took off! I think under the current Covid regime, it looks like a "gooder" to me: governments everywhere are doing anything and everything to "juice" their economies. As long as the advanced, industrialized countries continue this way, the EM markets will follow nicely along on the coattails. Just my 2 cents.

Observant1

Crash said:

SIGIX (SFGIX) was a disappointment to me. Not a disaster, but I did get out of it. He is a good communicator, but eventually, I tired of him admitting to mis-timed decisions or just bad investments in particular stocks.

As a former SIGIX investor, I agree with you.

MikeW

Hey @newgirl. The way I have invested in EM is to take positions in MIOPX, FSEAX, and CHIQ. By its nature EM tends to be more volatile so its difficult to try to invest in it without taking on a fair amount of risk. MIOPX diversifies that risk because EM is "only" about 37% of the portfolio whereas the balance is mainly in Europe, the U.S. and Canada. Kind of a barbell strategy which has worked very well over the long term. The fund is in the top 10% over the past 1, 3, 5, and 10 years for its category. however, its returns have been more muted over the past 1 and 3 months. FSEAX has had much higher returns over that short timeframe and if you pull up its long term performance on Morningstar its quite impressive. I really like the consistency in the performance of this fund. The other thing I like about FSEAX is that the manager has rotated more into financials so appears to be increasing his stakes on the value side more. I like to see a manager making those types of modifications to the portfolio based on valuations and their assessments of where the market is going. India and China are now the largest countries in the portfolio. I don't see any investments in Japan for FSEAX. here's the latest fact sheet.

https://www.fidelityinternational.com/legal/documents/SG-en/hffs.SG-en.SG.G-FEMU.pdf

You should also take a look at MATFX. I really like the manager of this fund very much and he's been running it with strong performance for about 15 years. This one is going to have a larger position in technology and communication services so that's something to consider. Those sectors are starting to lag here in the U.S. Will that be the case for EM too going forward? not sure.

For myself, I haven't added to EM in several months and have instead increased my stakes in U.S. financials and also in U.S. small cap because I see those as being a bit stronger in terms of opportunities and because my personal asset allocation has been low in those areas. But I will probably do so soon. I think EM Asia is very promising over the long term.

stillers

Scoping this cat:
DEM: ARTYX, FEMKX, MPACX, TSEMX, NWFFX, WBENX, WESNX
China: FHKCX, MCHFX, MCSMX
Pac/Asia exJ: FSEAX, MATFX
EM SC: WAEMX, VAESX

Own ARTYX and recently bought FSEAX
Just missed earning a port slot/Next to possibly add: FEMKX, FHKCX, MATFX, VAESX

BenWP

Many good suggestions already posted. Even though it’s new, I think Matthews is a good shop and that MEGMX has a good chance of riding the EM updraft. For small and micro caps EM, GPEOX is worth a look. I have never owned DRESX, Driehaus EM SCG, but it is on a tear since 2019. I do own 2 domestic Driehaus funds. At Schwab, the $10K minimum is waived.

AndyJ

@BenWP: Thanks for the note on Matthews. I didn't realize they'd launched a broad, not-just-Asia EM fund. Wasn't familiar with the manager, but see he's been with Matthews since 2018 after leaving Oppenheimer. MEGMX looks kind of blendy, which is probably a good thing.

That's a good one to watch. I've owned MEASX in the past, but just MAPIX at this point. I still wish Matthews hadn't dumped the value fund. It'd be doing great now with the big runup in Korea, where they had the bulk of the portfolio.

newgirl

Thanks All for the comments and suggestions . @BewnWP &@AndyJ > I was cautious about the Mathews fund due to the recent departures of fund managers. I definitely understand EM is inherently more risky, exactly why I was concentrating on the MAxDD and time to recovery . I am risk averse by nature and willing to give up some upside capture if it mitigates downside. Weirdly on Schwab the portfolio detail has 85 of japan in FSEAX .

Derf

More like 8.8% @newgirl. as of 11/30/20.

stillers

newgirl: ...I am risk averse by nature...

If so, then feast/famine EMs are NOT the place for you to be.

little5bee

@newgirl You could buy an EM ETF like DVYE...at least it pays a nice dividend.

newgirl

TYPO- I meant 8.8 % ...

mcmarasco

I just took a flying leap into MSAUX (pj) to “compliment” MGGPX and augment my Minuscule foreign investment.

I still believe the US is where to invest, but a little International might be advantageous and a provide a smidgen of “diversification”.

I chose it over FSEAX because of the tax efficiency. Outside of FSEAX this ms fund beats just about all peers in metrics and returns.

My major trepidation is 2019 & 2020 were very good years. Is 2021 and beyond going to be sub-par, if not negative?

Of course, this is a planned long-term investment, but ........

Any thoughts, suggestions or opinions?

Thx. Matt

JonGaltIII

IMHO - you have yourself a very good fund in MSAUX. I just invested in FSEAX this month... so I think you know where I think EM / Asia is headed. Also a long termer here.

mcmarasco

thanks JonG appreciate your thoughts!!!

May i ask why you chose FSEAX? Usually new management scares people away, especially from a fairly accomplished previous manager.

JonGaltIII

@mcmarasco Zhao has actually been in charge since middle of 2019. He overlapped with Dance. It’s a strong fund with a long history of superior performance vs. peers. For the most part (not all cases) I have less concern with Fidelity manager changes than some other fund families. They have a strong bench. Fine rebound from corona early 2020.

But as I said... you picked a fine fund. I’ve been thoroughly impressed with MS and am so fortunate to have a few of their funds.

https://seekingalpha.com/article/4360861-2-international-selections-will-profit-from-falling-u-s-dollar

mcmarasco

Thx again JonGaltIII for the clarification and the interesting article.

If you don’t mind, what MS funds do you own?

Are they major players in your portfolio?

Matt

JonGaltIII

MGGPX, MSEGX, MSSMX, MIGPX and yes I would say they are big players. I’m trying to avoid “dworsification”... it’s hard for me. But yes the first fund is my core International and the last one is the only one I could buy in that account. I have 10 percent or so in MSSMX coupled with my WAMCX. Replaced William Blair LC with MSEGX but I already had FBGRX and FDGRX... so a bit of duplication or too much in LC growth there.

I recently backtested a simple formula... 4 funds only. FXNAX, FBGRX, MGGPX and FBALX.... I couldn’t believe what I discovered. It was only about 4 percent less than my portfolio over 5 year plus. So I may have to reign myself in and KISS.