Suggestions for emerging markets exposure?

[mhdousa]

GMO's forecasts, which are based on mean reversion, tend to be quite accurate.  Per their most recent forecasts (attached), emerging markets have the most promising 7-year real return forecasts.

 

Are there any funds or other vehicles folks are using to get EM exposure?

 

Thanks.

-M

7YrForecasts_813.pdf

[writser]

VWO?

[CorpRaider]

You might take a look at the RAFI EM index ETF (PXH, I think), assuming you are a "fundamentalist" like most on this board. 

[DTEJD1997]

I am purchasing stocks on the "grey" market.

 

I've gotten some issues that trade mainly in China, Hong Kong, Europe and other spots.  There is not much liquidity in the USA, some of them only trade once a month.  HOWEVER, you can go to their home exchanges and see the volume and quotes.

 

Perfect example?  Emperor Entertainment, "EPETF".  Home exchange is Hong Kong and they own a casino in Macau.  Solid, value investment, and pays a nice dividend too!

[tripleoptician]

I've transitioned away from mutual funds, but continue to hold Mackenzie Cundill Recovery Fund managed by James Morton who trained under Peter Cundill. MER is of course high, but the post fee CAGR is quite solid and they follow a deep value strategy. It gives me access to markets I wouldn't know how to measure government/currency risks.

[mhdousa]

Thanks for the replies.

 

Writser and CorpRaider - I was hoping to avoid index funds. These tend to be cap-weighted, so countries with big recent run-ups are going to be overrepresented. I was looking for something more actively managed.

 

DJET1997 - I'd love to be able to do that. I just don't have the time to get that deep into thinly-traded stocks.

 

Tripleoptician - Unfortunately, I'm not Canadian.

 

Anyone know any good actively managed funds, or a good non-cap-weighted index, like EITEX which allocates evenly across countries?

 

[Packer16]

You can buy some of the recommended stocks here that are in EM countries (LUKOY - Russia) or (OIBR - Brazil) or if you want a fund there is Tempelton Emerging Markets (EMF) run by Mark Mobius which is selling at about a 5% discount to NAV.

 

Packer

[CorpRaider]

Sorry just throwing out ideas; you said emerging markets exposure, so I figured you wanted a fund and more of an "asset allocation" play.  The RAFI, of course is not cap weighted...that's the whole idea.  I personally doubt, however, that the fundamentally weighted stratagem is likely to work as well where in emerging markets, where the data reflecting the fundamentals is probably questionable...but its not cap weighted and you really just need to beat the cap weighted index to justify the product.  You could check out HLEMX, or maybe the Dodge and Cox international fund.  Or you could, of course, just buy some YUM or some SBUX or maybe some MDLZ.

[mhdousa]

Sorry just throwing out ideas; you said emerging markets exposure, so I figured you wanted a fund and more of an "asset allocation" play.  The RAFI, of course is not cap weighted...that's the whole idea.  I personally doubt, however, that the fundamentally weighted stratagem is likely to work as well where in emerging markets, where the data reflecting the fundamentals is probably questionable...but its not cap weighted and you really just need to beat the cap weighted index to justify the product.  You could check out HLEMX, or maybe the Dodge and Cox international fund.  Or you could, of course, just buy some YUM or some SBUX or maybe some MDLZ.

 

Right. I looked at the holdings and they looked pretty similar to those of VWO but, you're right, the weightings are a little different.

 

Thanks for the ideas.

 

[Guest]

Might wanna check this one out

 

http://quotes.morningstar.com/fund/sfgix/f?t=SFGIX

 

Foster had a very nice track record at Matthews.

[CorpRaider]

Just throwing out another idea in an attempt to be helpful here: You could maybe check out PEFIX.  One of the pimco stocksplus funds using the EM RAFI index for the futures side.

[bz1516]

Right now I like dry bulk shippers for a play on emerging markets especially as the Chinese consumer represents such a large segment of  the EM.  Investing directly in Chinese companies is too problematic for me and being spoiled with the US and Canada, just don't feel comfortable with the EMs in general.