Investment Strategy In Emerging Markets

Emerging markets offer investors the best long-term growth opportunities, but risk and volatility can be high. Many strategists prefer emerging-market stocks because they are less risky than developed-market equities. Emerging market equities offer higher returns on investment and higher returns on equity than developed markets. [Sources: 4, 17]

Emerging markets – Market economies may have relatively unstable governments and economies based on few industries. Compared to developed economies, emerging markets are more likely to pedal and may experience renewed political and economic uncertainty. Many of these risks are even greater when investing in emerging markets. [Sources: 9, 10, 13]

We cannot say when business will resume, but we can say with conviction that the strategy is very well placed if it does. Emerging markets can be very volatile and the timing of your investment is very important. Growth in emerging markets is not stable, and investment in them is long-term. [Sources: 11, 12]

The strategy continues to invest heavily in emerging markets, in sectors that correspond to the likely paths that the best economies can take. This includes frontier markets, as these economies offer some of the best growth and diversification opportunities in the world. [Sources: 1, 11]

For example, Coca-Cola’s earnings mix reflects the fact that it is popular in China and Japan, and that buying US equities – investment funds in the United States – can help you invest in emerging markets while addressing the evolving stability of the market. Alternatively, you could invest in companies based in emerging markets and listed outside the UK. When we see how to start investing in emerging markets, it may be worth investing directly in individual companies to find investment potential with high returns. The diligent investor can invest directly and explore companies in their respective markets. [Sources: 8, 9, 12]

The faster growth and the highest – declining – stocks are in the fastest growing economies such as China and India. Dividends are also an important part of emerging markets investment strategy, which is strongly linked to emerging and developing economies “growth, as dividends boost trust in companies. The more certain you are about what is happening in different countries, the more resilient you will be when you see a large emerging market being sold – and the higher the return. But, if basic caution is exercised, the benefits of investing in emerging markets can outweigh the risks. [Sources: 12, 17, 18]

Emerging market investors should also be aware of the risks and volatility associated with currency fluctuations. Investing in emerging market bonds can complement investing in equities, as bonds are generally portrayed as more stable and less volatile than other types of investments, such as equities and bonds. [Sources: 0, 9]

Investments in emerging markets may be subject to additional risks not associated with investments in more developed countries, such as currency fluctuations, political instability, and economic instability. International investment in emerging markets could create an additional risk associated with foreign exchange rates, foreign-exchange fluctuations, and currency depreciation. [Sources: 6, 7]

You can invest directly in listed companies based in emerging markets, in broad emerging market ETFs, or more specifically in a broad portfolio of emerging market companies. In general, emerging-market growth strategies in terms of market capitalization will invest in the companies with the largest market capitalization in their countries. One should also be aware of the particular risk considerations associated with investment in more developed countries, such as currency fluctuations, political instability, and economic instability in emerging economies. [Sources: 9, 16, 17]

Emerging markets are something of a sweet spot for quantum, and while advanced-country investors are doing better – as with emerging-market allocations – there is also a good chance that developing-country investors will do well in the long run – markets are investing. [Sources: 14, 18]

In a recent webinar hosted by Funds Europe, Datta talked about how quant investment can be applied to emerging markets and how certain strengths of quant strategies can be compared to a more traditional approach to fundamental investments. I have always been very interested in some of the investment factors that are prevalent in emerging markets, “said Datta. [Sources: 18]

The Fund’s investments in foreign securities carry additional risk compared to US securities, while investments in emerging market securities generally carry even higher risk. Global emerging markets strategy typically holds about 10% of its portfolio in the United States and will be relatively focused on the US. While the emerging markets equity strategy primarily invests in companies headquartered in markets that are included in MSCI’s Emerging Markets Index (as defined by MMSI), up to 10% of the portfolio can be invested in frontier markets and / or frontier-based companies, whereas an emerging markets growth strategy can generally invest in equities and bonds of companies from other countries outside emerging markets. [Sources: 2, 3, 5, 16]

Emerging markets have a higher downside risk than developed markets, taking into account all relevant risk characteristics. Adding emerging-market growth to the portfolio is a sensible strategy for risk-mitigation for long-term investments in the United States. [Sources: 12, 15]

Sources:

(0): https://www.fortpittcapital.com/investing-in-emerging-markets/

(1): https://www.globalxetfs.com/a-new-path-for-emerging-market-investing/

(2): https://www.coronation.com/us/global-investment-strategies/emerging-markets-equity/

(3): https://www.guggenheiminvestments.com/mutual-funds/fund/ryiex-emerging-markets-bond-strategy

(4): https://www.thinkadvisor.com/2020/07/13/gmo-5-reasons-to-own-emerging-market-stocks-now/

(5): https://www.barrowhanley.com/product/1344/emerging-markets?type=V

(6): https://investments.miraeasset.us/mutual-funds/emerging-markets-fund

(7): https://gqgpartners.com/strategies/emerging-markets-equity/

(8): https://www.schwab.com/resource-center/insights/content/emerging-markets-what-you-should-know

(9): https://www.ig.com/en/trading-strategies/how-to-invest-in-emerging-markets-191219

(10): https://cppinvest.com/emerging-markets-fund/

(11): https://www.vaneck.com/ucits/blog/emerging-markets-equity/looking-beyond-covid-19-investing-in-the-future-of-emerging-markets-today

(12): https://www.investopedia.com/articles/basics/11/should-you-invest-emerging-markets.asp

(13): https://www.calamos.com/insights/volatility-opportunity-guide/understanding-emerging-markets-volatility/

(14): https://www.eurekahedge.com/Research/News/902/Emerging-Markets-To-Hedge-or-Not-to-Hedge

(15): https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3127422_code331701.pdf?abstractid=3127422&mirid=1

(16): https://www.dsmcapital.com/emerging-markets-growth/

(17): https://www.lynalden.com/invest-in-emerging-markets/

(18): https://www.funds-europe.com/digital-advertorials/why-emerging-markets-are-a-sweet-spot-for-quant-investing

3 ETFs Enjoying The Benefits of Taiwan Semiconductor Exposure

“It has about 11% allocated to TSMC (less than half of EWT’s exposure), with about 25% of assets overall invested in Taiwanese stocks and another …

It fell 7.6% on Tuesday, but the rally by shares of Taiwan Semiconductor (NYSE: TSM) has been nothing short of breathtaking.

The semiconductor foundry company nearly doubled off its March lows and, along the way, became one of the 10 largest companies in the world by market capitalization. With a market value of about $350 billion, Taiwan Semiconductor is larger than any U.S.-based chip name and roughly $100 billion bigger than both Intel (NASDAQ: INTC) and Nvidia (NASDAQ: NVDA).

The Taiwanese semiconductor Goliath also is also acting as the primary driver behind its home country’s performance as one of 2020’s best-performing emerging markets, meaning plenty of exchange-traded funds, including some oft-overlooked names, are benefiting from TSM bullishness.

Here are a few that fit that bill.

iShares MSCI Taiwan ETF (EWT)

The iShares MSCI Taiwan ETF (NYSE: EWT) is the largest ETF dedicated to stocks in that country and it devotes more than 27% of its weight to the locally listed shares of Taiwan Semiconductor, good for one of the largest allocations to that stock among all ETFs.

That hefty exposure is working in favor of investors this year as EWT is higher by almost 9% compared to a loss of 2.53% for the MSCI Emerging Markets Index, a benchmark in which Taiwan is one of the largest country weights. However, there are some risks with that big TSM weight.

“Investors who want to maintain exposure to Taiwan and its dynamic, Tech-oriented economy may wish to reduce exposure to TSMC, either by partially shorting shares of TSM to offset the exposure from EWT, or by switching to an ETF with less concentration in Taiwan Semi,” according to the ETF Research Center (ETFRC).

Alpha Architect Freedom 100 Emerging Markets ETF (FRDM)

Up almost 9% over the past month, the Alpha Architect Freedom 100 Emerging Markets ETF (CBOE: FRDM) is benefiting from a more than 11.2% weight to TSM, putting it in rare air among U.S.-listed ETFs.

That performance is all the more admirable when considering FRDM’s freedom weighting methodology, one should investors well over the long haul, excludes Chinese stocks.

“One such fund we like and have highlighted before is the Freedom 100 Emerging Markets ETF,” according to ETFRC. “It has about 11% allocated to TSMC (less than half of EWT’s exposure), with about 25% of assets overall invested in Taiwanese stocks and another 20% invested in South Korea. And as we highlighted two weeks ago, companies in FRDM enjoy a higher growth rate than either EWT or the iShares MSCI South Korea ETF (NYS:EWY).

VanEck Vectors Semiconductor ETF (SMH)

The VanEck Vectors Semiconductor ETF (NASDAQ: SMH) has a 15.34% weight to TSM, or nearly 700 basis points than it allocates to Nvidia, its second-largest holding. Additionally. SMH’s TSM exposure is almost 1,000 basis points higher than what’s found in the PHLX SOX Semiconductor Sector Index.

Asian Stocks Rise on Trade; Treasuries Advance: Markets Wrap

“Risk-taking will really depend on developments in the U.S.-China trade war,” Anna Han, equity strategist at Wells Fargo Securities LLC, told …

(Bloomberg) — U.S. equity futures edged higher with Asian stocks on Thursday while European shares jumped as investors awaited the next developments in a week dominated by political dramas and a lack of clarity over trade. In a sign of the mixed sentiment, Treasuries also climbed, continuing a choppy few days.

Contracts for the S&P 500 Index, Nasdaq 100 and Dow Jones Industrial Average all fluctuated before turning modestly higher, pointing to more gains on Wall Street after the underlying gauges rallied on Wednesday. The dollar steadied after jumping the most since March a day earlier, while gold climbed following a plunge in the previous session. The pound pared a drop to trade little changed amid rising acrimony in Parliament as the U.K. limps toward Brexit.

The Stoxx Europe 600 Index extended an advance through the morning despite a flurry of negative news for individual companies. ABN Amro Bank slumped as it disclosed a criminal probe, while Imperial Brands shares slid after the company cut its guidance. Education publisher Pearson plunged after saying earnings would be at the low end of the expected range.

Investors appear divided on the outlook after markets were buffeted by contrasting headlines on trade and escalating political tensions in recent days. President Donald Trump, facing an impeachment inquiry, tried sending an upbeat message when he said a trade agreement with China is getting “closer and closer” and there’s a “good chance” a deal can be reached.

“Risk-taking will really depend on developments in the U.S.-China trade war,” Anna Han, equity strategist at Wells Fargo Securities LLC, told Bloomberg TV. Though in the short term you may see some risk aversion, “on a three-, six-, or 12-month look we think it will be more risk-on as long as we don’t see anything crazy with a derailment on the trade talks.”

Elsewhere, oil fluctuated as traders weighed the implications of a U.S. move to impose penalties on a handful of Chinese tanker firms for carrying Iranian crude. In Asia, equities in Japan, Hong Kong and India helped drag the regional gauge up as shares in China and Australia fell. The New Zealand dollar climbed and traders trimmed bets for more easing after the central bank governor said interest-rate cuts are working.

These are some key events coming up this week:

Core PCE — the Fed’s preferred inflation measure — is due Friday. The forecast is for 1.8%.

Here are the main moves in markets:

Stocks

Futures on the S&P 500 Index increased 0.2% as of 7:19 a.m. New York time.The Stoxx Europe 600 Index advanced 0.7%.The U.K.’s FTSE 100 Index gained 1%.The MSCI Asia Pacific Index gained 0.2%.The MSCI Emerging Market Index climbed 0.4%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro fell 0.1% to $1.0932.The British pound declined 0.1% to $1.2346.The Japanese yen strengthened 0.1% to 107.62 per dollar.

Bonds

The yield on 10-year Treasuries fell three basis points to 1.71%.Germany’s 10-year yield declined one basis point to -0.58%.Britain’s 10-year yield dipped less than one basis point to 0.533%.

Commodities

Gold gained 0.3% to $1,508.23 an ounce.West Texas Intermediate crude dipped 0.1% to $56.44 a barrel.

–With assistance from Adam Haigh and Cormac Mullen.

To contact the reporter on this story: Samuel Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Todd White

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

Vanguard Health Care ETF (NYSEARCA:VHT) Shares Acquired by IHT Wealth Management LLC

IHT Wealth Management LLC boosted its stake in Vanguard Health Care ETF (NYSEARCA:VHT) by 22.3% in the 2nd quarter, according to the …

Vanguard Health Care ETF logoIHT Wealth Management LLC boosted its stake in Vanguard Health Care ETF (NYSEARCA:VHT) by 22.3% in the 2nd quarter, according to the company in its most recent 13F filing with the Securities & Exchange Commission. The firm owned 21,354 shares of the company’s stock after purchasing an additional 3,889 shares during the quarter. IHT Wealth Management LLC’s holdings in Vanguard Health Care ETF were worth $3,714,000 as of its most recent filing with the Securities & Exchange Commission.

Several other institutional investors and hedge funds have also modified their holdings of VHT. Mid Atlantic Financial Management Inc. ADV raised its holdings in shares of Vanguard Health Care ETF by 58.2% during the 2nd quarter. Mid Atlantic Financial Management Inc. ADV now owns 2,848 shares of the company’s stock valued at $495,000 after buying an additional 1,048 shares in the last quarter. H D Vest Advisory Services increased its stake in Vanguard Health Care ETF by 29.7% in the 2nd quarter. H D Vest Advisory Services now owns 5,766 shares of the company’s stock worth $1,003,000 after purchasing an additional 1,320 shares during the period. Private Vista LLC increased its stake in Vanguard Health Care ETF by 8.0% in the 1st quarter. Private Vista LLC now owns 2,375 shares of the company’s stock worth $409,000 after purchasing an additional 175 shares during the period. Fisher Asset Management LLC increased its stake in Vanguard Health Care ETF by 6.9% in the 2nd quarter. Fisher Asset Management LLC now owns 1,648 shares of the company’s stock worth $287,000 after purchasing an additional 107 shares during the period. Finally, Brandywine Oak Private Wealth LLC increased its stake in Vanguard Health Care ETF by 372.0% in the 1st quarter. Brandywine Oak Private Wealth LLC now owns 1,940 shares of the company’s stock worth $334,000 after purchasing an additional 1,529 shares during the period.

VHT opened at $171.09 on Friday. Vanguard Health Care ETF has a 52-week low of $149.55 and a 52-week high of $181.92. The stock’s 50 day moving average price is $170.19 and its 200-day moving average price is $170.40.

About Vanguard Health Care ETF

Vanguard Health Care ETF seeks to track the investment performance of the MSCI US Investable Market Health Care 25/50 Index, a benchmark of large-, mid-, and small-cap United States stocks in the health care sector, as classified under the Global Industry Classification Standard (GICS). This GICS sector is made up of two main industry groups.

See Also: Initial Coin Offering (ICO)

Institutional Ownership by Quarter for Vanguard Health Care ETF (NYSEARCA:VHT)

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