Over the past few weeks it appears that the emerging market sector and real estate are coming back from a lagging period.
I presently hold DREGX. It has very little small cap so I am considering adding DRESX with the reservation that it does not have a long record
The following 4 EM funds and one ETF are funds that I am considering adding or adding more to my portfolio. You can see that ETF's do not do as well indicating that the alpha of the MF are important for return in emerging markets.
Other comments on emerging market funds that you plan on buying would be appreciated.
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Symbol Fund Name 1 Wk 13 Wk YTD 1 Yr 3 Yr (Annualized) 5 Yr (Annualized) 10 Yr (Annualized)
DREGX Driehaus:Emerg Mkt Gr 1.50% 5.74% 8.36% 16.99% 4.54% 18.61% 15.04%
DRESX Driehaus:EM SmCap Gro 1.42% 2.02% 8.51% 17.30% -- -- --
GBFAX Van Eck:Emerg Mkts;A 2.37% 5.48% 7.03% 17.27% 2.77% 20.38% 11.53%
FRONX Forward:Frnt Strtgy;Inv 0.26% 4.20% 16.53% 17.77% 0.87% -- --
VWO Vanguard FTSE Em Mkt ETF 1.63% 7.57% -3.22% 4.61% -0.75% 14.13%
Comments
ALSO: EM debt. It will rise out of its doldrums so long as worldwide equities are not in a swoon. MAINX. I recently added to that one. It amounted to a 33% increase in the dollar-amount I had invested there, originally. Still not a big player in my portfolio.
I only recently noticed that emerging market funds don't have nearly the percentage of equities in emerging market countries as one (or at least I) might expect. M* reports the median EM percentage of diversified EM funds is 68.5%. Seafarer's 65/35 split fits right in there.
You're right that its charter allows it to go anywhere, but unlike a vanilla international fund, Seafarer "may invest a significant amount of its net assets (50% to 80% under normal market conditions) in" EM securities. (From prospectus.) That says that where it is now (EM exposure squarely in the middle of the pack) is where one should normally expect to find it.
In the way of a "compare and contrast" exercise, look at TGBAX (Templeton Global Bond Fund). It has gone up to 100% in EM bonds (though it seems to have pulled back lately). That's a fund that could look like an EM bond fund because a snapshot found it that way, but unlike Seafarer, there's no assurance that it would tend to stay in emerging markets.
Personally, I prefer to pay others (i.e. fund managers) to watch the trends and shift money from market to market gradually as the patterns develop. That's why I'm more inclined to invest in diversified international funds where the managers have lots of flexibility and will dive into emerging markets when it seems appropriate. In that sense, I would personally find Seafarer somewhat more attractive than "pure" EM funds. YMMV.
Here are latest MFO Ratings for funds mentioned above, plus a couple others:
Both Driehaus funds are Great Owls.
PS. If you double-click on image, it will go full screen.
Would it be possible to develop a MFO ratings chart of the top 15 performing emerging markets mutual funds over the past 1, 3, 5 and 10 years. I am intrigued by the data that David has shown in his September commentary about emerging markets being a promising asset class in terms of valuation. However, I'd like to research some additional funds to the ones he has suggested. Such a chart would prove really helpful in knowing which additional funds to focus on.
thanks
Michael
JIC, here's link to MFO Ratings Definitions page.
Have you a chart limited to the "70 or so" 20 year Great Owl funds?
Acadian EMs Instl (AEMGX)
Morgan Stanley Inst EMs I (MGEMX)
Templeton Instl EMs Ser Adv (TEEMX)
Russell Emerging Markets S (REMSX)
BlackRock EMs Instl (MADCX)
Templeton Dev Mkts A (TEDMX)
Fidelity Emerging Markets (FEMKX)
FEMKX has worst record of bunch.
Hoping to post all the MFO GOs this quarter shortly.
Here's M* performance plot:
DREGX will go into my rollover IRA and will be a small percentage of the total. The -62% loss during 2007-2009 would occur of course if you stayed with it. I am disciplined and monitor and sell when there is a certain amount of loss.
I too believe in paying a higher ER if the long term return is very good. For years I only looked at funds if they had low ER's and I missed some great returns. I now have come to the conclusion that the return is net of the expenses. If other people did not think the way I now do then the high ER funds would dry up .
prinx
prinx
thanks for that. over the decades, i've tried to implement various similar stop-loss ideas with a success rate of nearly ... 0%. it's much easier to think about and plan for and so on than it is to actually put into effect, at least for me. in your shoes, once i hit that 8% mark, i'd let it ride to 8.5%, then 9%, all because hope springs eternal. and then i'd sell out at some even greater loss and be so traumatized that, when the market turned around, it did so without me for wwwwway toooo long. or else i'd sell out at 8% and the market would turn around right then, leaving me in the lurch and not knowing what to do.
ymmv, obviously, and i hope it does. good luck out there!