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Lewis Braham: Time For Emerging Market Currency Funds
FYI: (Click On Article Title At Top Of google Search) For years, the dollar has been the only game in town. But emerging market currencies are rebounding, and it could be a good time to get in Regards, Ted https://www.google.com/#q=Time+For+Emerging+Market+Currency+Funds
I bought PLMDX in my IRA few months back because I had the same epiphany. Now that the gig is up I am going to watch it like a hawk and sell at first sign of trouble.
Finally I bought EMB and PELBX, Pimco Emerging Local Bond, Institutional. I left that asset class in 2009, but this time I keep a lower % allocation. Beware that EM debts can go down badly as shown in 2007. The only safe bet is cash.
@275LB_NY_MCPO, Basically yes. I generally prefer mutual funds over ETFs without dealing with the ask/bid spread. EMB provides a low cost broad exposure to EM debts while the debts are currency hedged (or in USD). The daily trading volume is high enough that minimizes the spread. Similar EM bond mutual funds, on the other hand, cost considerably more. PELBX is more an opportunistic play on the local currency. Because of the added currency risk, I keep the % about half of that of EMB. I keep reminding myself of 2007 where the drawdown was significant.
Thanks! Enjoy your weekend! I believe I read something recently where a few EM bond funds/managers are proficient at both of these strategies... TCW???
Comments
Do you mind me asking why both the ETF and PIMCO fund??? I do like this asset class... is it to hedge your "bet" because one is USD???
thanks.
Basically yes. I generally prefer mutual funds over ETFs without dealing with the ask/bid spread. EMB provides a low cost broad exposure to EM debts while the debts are currency hedged (or in USD). The daily trading volume is high enough that minimizes the spread. Similar EM bond mutual funds, on the other hand, cost considerably more. PELBX is more an opportunistic play on the local currency. Because of the added currency risk, I keep the % about half of that of EMB. I keep reminding myself of 2007 where the drawdown was significant.
http://news.morningstar.com/cover/videocenter.aspx?id=808812
Fidelity New Market fund, FNMIX, is largely USD hedged.
DoubleLine EM bond, DBLEX, invested in both.