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Morningstar, Day One: Northern Trust on emerging and frontier markets – in 125 words

David_Snowball
edited June 2013 in Fund Discussions
Northern’s cater to the rich but has retail share class funds, FlexShare ETFs and multi-manager funds. They are the world’s 5th largest investor in frontier markets. Frontier markets are currently 1% of global market cap, emerging markets are 12% and both have GDP growth 350% greater than the developed world’s. EM/F stocks sell at a 20% discount to developed stocks. Northern’s research shows that the same factors that increase equity returns in the developed world (small, value, wide moat, dividend paying) also predict excess returns in emerging and frontier markets. In September 2012 they launched the FlexShares Emerging Markets Factor Tilt Index Fund (TLTE) that tilts toward Fama-French factors, which is to say it holds more small and more value than a standard e.m. index.

Comments

  • MaxBialystockMaxBialystock
    So they are not by any means in panic mode lately, eh?
  • CharlesCharles
    edited June 2013
    EM/Fs certainly testing investor fortitude lately...

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  • scott
    edited June 2013
    Adding to EM names and looking for new/other names. The increasingly ADD nature of markets is becoming ridiculous. Watching CNBC and not one person saying add to EM - so many people "AVOID EM!!!!"

  • MaxBialystockMaxBialystock
    Trader mentality. Nano-second, computerized moves. That's where their thoughts seem to be centered. Instant profit, then get out. The ol' "in-out-in-out-in-out." Ya, that should remind you of something...
  • Old_JoeOld_Joe
    edited June 2013
    I'm trying to remember, but it was so long ago...
  • JimJ
    Wasatch Frontier Emerging Small Countries (WAFMX) still up 12.50% YTD. Over-weighted in consumer defensive stocks helps dampen volatility
  • AndyJ
    Reply to @JimJ: Mark Yockey of Artisan also picked up that strategy and ran with it, and he's pretty much out of the doghouse and into the penthouse.
  • Sven
    Reply to @AndyJ: The change came with the addition of the other co-manager. Today Yockey's fund invested much less in financial sector and ARTIX has improved in the last several years.
  • AndyJ
    edited June 2013
    Reply to @scott: According to the Barron's blog, Merrill Lynch says EM stocks are now just above the first buy signal since 2011. Their signal is apparently based on fund flows.
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