Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Over the last three years I have dollar cost averaged into WAEMX which, though it has a high expense ratio, has proven itself in both up and down markets.
What are others finding working in this space?
Here it is charted against the two small cap ETFs mentioned in the article:
Only future can tell... During the first 1.5 years since inception (from October 2007 to March 2009, very bad timing), WAEMX was down %62, which is scary, but then it was up a lot. As a result, despite its recent fast growth, now it is only %35 up from inception. During the last (less than a) year, their new fund WAFMX (Wasatch Frontier Emerg Sm Countrs) was doing much better than WAEMX; let us just hope that 2008-2009 is not going to repeat...
Interesting premise from the WSJ article...which appears to be that large cap names in the BRICs can be a drag on performance.
It would be interesting to see any analysis of EM availability within 401(K) plans. My guess is that it is limited, and what would routinely be available falls into this category.
Personally, my 401(K) has one EM name...ODVYX (Oppenheimer Developing Markets). I own this, and am quite happy, but realize that it's big...$27B AUM, and thus has limited options outside of the LC space.
I have equal EM exposure outside of my 401(k) with a handful of names...Matthews (MACSX, MAPTX), Grandeur Peaks (GPGOX) and Seafarer (SFGIX).
I like the barbell of LC and divi payors along with small cap names. If I were to take a guess as to which fund would do the best over the next 10 years, I would say Grandeur Peaks...though it may not be considered a pure EM fund.
The argument as stated in the article parallels one of Andrew Foster's main investment theses at SFGIX.
My EM stock $ is all with Matthews and Seafarer, except for a small position in FEO, Aberdeen's EM 'balanced' CEF. FEO is pretty heavily invested in the global mega-caps; haven't followed it long enough to know if that's always the case ... but it's usually tilted a little toward Latin America and E. Europe, so is a geographic diversifier for this house's port.
MACSX is a little more of a large-cap fund, but MAPIX and SFGIX seem to be pretty much all-cap, so as long as I have $ in the latter two, I don't see a lot of need for a separate EM (or Asia-Pac) mid-small cap fund.
Since the 2008 meltdown I have been impressed with the performance of WAEMX as well as MAPIX. Both seem to be out performing EEM (Emerging Market Eq Index) and EMX (Emerging Market Small cap Index) as well as EMB (Emerging Market Bonds).
I've recently switched over to EITEX for my primary exposure to emerging markets. It is less concentrated than the MSCI Emerging Markets index in both individual holdings and country weighting and has more expose to the frontier markets as well. In addition, the expense ratio and turnover are both low.
There are so many inefficiencies in the EM space, and there are a good number of managers who have staked out a spot for themselves. We use ODVYX and WAEMX for real EM exposure, and MAPIX for pure Asian play, even if most of it is not EM - only about 30%. SIGIX is attractive, but it also has a chunk in developed markets - around 1/3. If you don't have a really good manager, however, you are probably better off with EEM.
In the LC/MC EM space, I continue to like EEMV which has a rock-bottom net expense ratio of 0.25% and attractive back-tested performance as shown HERE. Among actively managed funds, ABEMX/AEMSX continues to float to the top, and HIEMX under Rajiv Jain has performed well and has not been an index hugger by country exposure.
Comments
What are others finding working in this space?
Here it is charted against the two small cap ETFs mentioned in the article:
BRICs can be a drag on performance.
It would be interesting to see any analysis of EM availability within 401(K) plans. My guess is that it is limited, and what would routinely be available falls into this category.
Personally, my 401(K) has one EM name...ODVYX (Oppenheimer Developing Markets). I own this, and am quite happy, but realize that it's big...$27B AUM, and thus has limited options outside of the LC space.
I have equal EM exposure outside of my 401(k) with a handful of names...Matthews (MACSX, MAPTX), Grandeur Peaks (GPGOX) and Seafarer (SFGIX).
I like the barbell of LC and divi payors along with small cap names. If I were to take a guess as to which fund would do the best over the next 10 years, I would say Grandeur Peaks...though it may not be considered a pure EM fund.
The argument as stated in the article parallels one of Andrew Foster's main investment theses at SFGIX.
My EM stock $ is all with Matthews and Seafarer, except for a small position in FEO, Aberdeen's EM 'balanced' CEF. FEO is pretty heavily invested in the global mega-caps; haven't followed it long enough to know if that's always the case ... but it's usually tilted a little toward Latin America and E. Europe, so is a geographic diversifier for this house's port.
MACSX is a little more of a large-cap fund, but MAPIX and SFGIX seem to be pretty much all-cap, so as long as I have $ in the latter two, I don't see a lot of need for a separate EM (or Asia-Pac) mid-small cap fund.
Thanks for the heads up on WAFMX... I will keep an eye on it.
Kevin