Download PDF: Chile and Russia Similarities Both Chilean and Russian economy are dependent on natural resources, with copper accounting for 48% of Chile’s exports and oil & gas accounting for 41% of Russian exports. Both countries have rank moderately across EM countries in terms of exports size relative to GDP and rank lowly in termsContinue reading “The Tale of Two Countries: Chile and Russia”
Tag Archives: emerging markets
The Sweet Spot for Emerging Market Bonds
Downlaod PDF: Emerging Market Bonds High-yielding EM government and corporate bonds are likely to perform well in negative yields environment as investors search for yield. Although debt level has been rising, interest cost has been declining. Profit growth has also been outpacing the increase in interest cost, which does not translate the increase in debtContinue reading “The Sweet Spot for Emerging Market Bonds”
ETF Outlook and Overview of Smart/Multifactor ETF
Downlaod PDF: EM ETF PC Under-Investment in Emerging Markets Equity The past two decades’ development of global trade and foreign investment in developing countries have lifted the living standard of many, particularly in emerging Asian economies. Share of emerging markets economy in the world has increased by 20% to 34% of world as faster growthContinue reading “ETF Outlook and Overview of Smart/Multifactor ETF”
August 2019: The Long View, Turkey and Revisiting This Year Investment Thesis
Read in PDF: Monthly 201908 As bond yields continue to stumble globally, we expect that more SWF and pension fund will divert allocation from fixed income to both public and private equity, which would be a boon for the deepening of stock market globally. Holding developed countries’ government bond is a sure way of losingContinue reading “August 2019: The Long View, Turkey and Revisiting This Year Investment Thesis”
The Case for Underweighting U.S. Equity
And a Once in a Decade Opportunity to Overweight EM Equity In the last decade, Emerging Markets equity performance has been lagging its U.S. counterparts by a significant 50% margin. Undoubtedly, part of this is contributed by the gain of = hot technology stocks in the U.S. (FAANG). However, currently U.S. earnings growth is peakingContinue reading “The Case for Underweighting U.S. Equity”
May 2019: The Dollar Story and Where Are We in the Cycle?
Download PDF: Monthly_2019_April The strength of the dollar has dismayed many investors, us included. The weakening growth in the U.S., as measured by final demand component of the GDP, has pointed downward and should lead to a weaker dollar at a time when China is reflating. We still believe that the current improvement in EuroContinue reading “May 2019: The Dollar Story and Where Are We in the Cycle?”
VIX-Based Hedging Strategy for Emerging Markets Equity Portfolio
Download PDF: EM_VIX_Hedging_strategy EM equities’ superior returns relative to its DM counterparts have been associated with higher volatility and left-tail risk. Rule-based portfolio hedging reduces the severity of tail-risk and performance drag while improving EM portfolio’s risk-return profile over the long run. Currently EM VIX spread over S&P500 VIX is at an all time low,Continue reading “VIX-Based Hedging Strategy for Emerging Markets Equity Portfolio”
EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia
Download PDF: Q12019_LATAM_EMEA_Update A revisit of our investment thesis on emerging markets equities Mexico + (Overweight) Last year Mexican stocks were among the worst performer in the EM universe for two main reasons. First, the domestic economy is experiencing a sharp slowdown from industrial and oil production. Second, the increase in global risk aversion hasContinue reading “EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia”
April 2019: Is the Recession in Front or Behind Us?
Download PDF: March19_PC It is tempting to argue that we are currently experiencing the “manufacturing recession”, similar to the “commodity recession” we experienced back in 2011-2012 and 2014-2015. All the data is supporting the thesis that we did have a recession in 2018, albeit a mild one: 1) industrial production and manufacturing PMI weakens inContinue reading “April 2019: Is the Recession in Front or Behind Us?”
Lessons from Past Emerging Markets Cycles: Part II (Bonds)
PDF: Lessons from Past Emerging Markets Cycles Part II -Bonds In the past five years, the size of Emerging Market corporate and sovereign bonds has increased by over 50%. This highlights the increasing need of investment for EM to continue growing. Although currently the size of EM bond market is pale compared to U.S. bondContinue reading “Lessons from Past Emerging Markets Cycles: Part II (Bonds)”
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