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Given the strong chance that the U.S. economy will barely crawl the next 2-3 years (maybe even a small recession in 2014?), and the fact that much of Europe is already in recession and could be in the dumps for a long time, where else is there besides emerging markets? Yes, you need to be cautious. But if you want real growth, it would appear the emerging markets are the only game in town, so to speak. WAEMX, THDIX, ODVYX, ABEMX (if you can get it) are perhaps the strongest, all with great managers. MAPIX and MACSX are not emerging market funds, but they certainly have some em stocks and companies that do a lot of business in emerging Asia.
For broader international, it's hard to find fault with OAKIX, SGOIX, WAIGX, QFVIX. IVWIX has certainly been a disappointment, although it is doing better by comparison this year, but it is not what we would call an international fund, with 30% in domestics stocks and 13% in bonds.
OAKIX is concentrated in Europe, but Tweedy is, too--- and with much less risk. I used to own Tweedy. It stalled, but over the long run has proven to be wonderful. In fact, the risk/return profile could not be any better, according to Morningstar. ...M* has quit being prompt with info on a daily basis, but that sort of ranking is just stellar. Tweedy is granted 5 stars and a silver decoration. ...OAKIX is 5 stars and GOLD, but the risk is quite a bit higher. ...I must recommend EM, too, along with BobC. and I echo the votes in favor of MAPIX and MACSX. I own both. Very happy with performance. I've been in MACSX since '03, when I started investing. Otherwise, take a look at SFGIX, piloted by A. Foster--- who used to be at the helm in one or two Matthews funds. It does not yet have much of a history. MAPIX = 35.64% of my holdings. MACSX = 2.61% and SFGIX = 2.72%.
I think if developed markets are going to muddle along (and the question then becomes where would they be without monetary policy), emerging markets are not going to decouple, although they may outperform over time if some growth continues. If your risk tolerance is low, ECON (EM Consumer Staples) remains an interesting option. There was also ETF (Emerging Market Telecom and Infrastructure), but that fund has changed its investment focus. DEM (EM Dividend) also at least provides a nice income while you wait.
Reply to @Mona: Hello. I'm really not any sort of professional. I have noticed what you just spelled out, too. I have seen that for extended periods, MACSX will lag, but then do much better somehow when other Asian funds are doing just a LITTLE bit better. I do watch them closely. Seems like MAPIX took off, then slowed, while MACSX caught up. MACSX holds a lot of convertibles, historically, unlike MAPIX. I dunno if that accounts for the herky-jerky movement upward in concentrated spurts, but I'm glad I'm still in both of those funds. If MACSX did not somehow randomly become the fund we "raid" for emergencies and vacations, I can't imagine how much money I'd be holding in that fund over a 10-year period! As far as I'm concerned, it is certainly worth it to own both.
Reply to @MaxBialystock: I don't think Emerging Markets will do well when Europe is in recession and US is slowing.... Emerging markets need to sell their goodies to the developed world as their market does not have internal consumer spending that is big enough to offset. EM only do well under this scenario if their government stimulate the economy with infrastructure work. China did that in 2008 but they have already have excess capacity. You can build so many empty mega cities. Let's be realistic...
Some of us, including David, sold MACSX and bought MAINX and MAPIX (bought, if already not there in our portfolios). In my case, I replaced MACSX with MAINX (I already had MAPIX) and adjusting the stock/bond exposure appropriately using these two funds (MAPIX and MAINX). In addition, I bought SFGIX (kinda true replacement for MACSX in my portfolio) as I liked the idea of investing MACSX style in the entire EM area. At this point, SFGIX is mostly into Asia but manager is planning to make it a true EM Growth and Income fund as opportunities open up elsewhere. I hope it would also replicate stellar perfomrance of MACSX.
Reply to @scott: Both you and Investor's arguments make sense. Many large cap EM stocks are export depended and they will not do well when developed countries slow or even entering recession. I think the smaller EM stocks are likely to do better while they focus on local consumers rather than export. This year Wasatch EM Small Cap and Frontier Market funds are doing much better than the large cap EM index, VWO. I have considered ECON but decided not to pursue it because of its low daily trading volume. DEM is okay but one needs to review its holdings carefully - too many large export oriented companies.
On SFGIX, Andrew F. has already branched out considerably from Asia. He's got 65% in Asia now, versus the index funds VWO at 61% and EEM at 62%. So he's only somewhat overweight Asia (and underweight Latin America & Africa, overweight emerging Europe). He's made the transition to a true EM fund much faster than I expected.
FWIW, I split my TBGVX 50-50 with TBCUX, which is unhedged against the dollar with the same managers, when it became available; and it seems to have done better, according to my TDA percentage gains. Guess it's a dollar plus EM bet.
Comments
For broader international, it's hard to find fault with OAKIX, SGOIX, WAIGX, QFVIX. IVWIX has certainly been a disappointment, although it is doing better by comparison this year, but it is not what we would call an international fund, with 30% in domestics stocks and 13% in bonds.
MAPIX = 35.64% of my holdings. MACSX = 2.61% and SFGIX = 2.72%.
Max,
It looks like MAPIX and MACSX have been running neck and neck for about a one and three year period with similar risks. What is your take?
Mona
Some of us, including David, sold MACSX and bought MAINX and MAPIX (bought, if already not there in our portfolios). In my case, I replaced MACSX with MAINX (I already had MAPIX) and adjusting the stock/bond exposure appropriately using these two funds (MAPIX and MAINX). In addition, I bought SFGIX (kinda true replacement for MACSX in my portfolio) as I liked the idea of investing MACSX style in the entire EM area. At this point, SFGIX is mostly into Asia but manager is planning to make it a true EM Growth and Income fund as opportunities open up elsewhere. I hope it would also replicate stellar perfomrance of MACSX.