On the last day of May, stocks gained significant ground in Japan, China, Europe and the United States. Jim Cramer of CNBC Mad Money fame announced that you don’t get that type of across-the-board activity often, and that a rising tide for a global rally would lift all equity boats going forward. On the first day of June, however, worldwide markets hammered stock assets by 1.5%-3%. Mr. [...] Continue Reading...
Demand for foreign bonds in foreign currencies have obliterated analyst expectations. For instance, Wisdom Tree Emerging Market Local Debt (ELD) swelled to nearly $1 billion in net assets in 9 months time. By way of comparison, the dollar-denominated PowerShares Emerging Market Sovereign Debt Fund (PCY) began nearly 3+ years before ELD, though both PCY and ELD have roughly the [...] Continue Reading...
The emerging market growth story is beautiful in its simplicity. Younger people with increasing amounts of income in industrializing countries should drive demand for more products, services, infrastructure and housing. Of course, the emergers are not without their concerns. They face more vexing inflation than developed economies. They’re more dependent on the natural resources they can or cannot export. [...] Continue Reading...
U.S. stock assets fell in each of the first two weeks of May. And they’re not off to a rousing start in the third. In spite of apparent weakness, however, the glass can hardly be considered half-empty. The SPDR Dividend Fund (SDY) is only 1% off 52-week highs. Even the SPDR S&P 500 Trust (SPY) is within 3% [...] Continue Reading...
Picking individual countries is not entirely dissimiliar to picking individual companies. You can tirelessly pursue “best of breed” stocks, but you may have better fortune with diversified index funds. Similarly, you might endeavor to ferret out a premier single-country ETF. Yet, over time, employing a diversified regional ETF is likely to provide more rewarding risk-adjusted results. With that said, if you’re willing to put [...] Continue Reading...
Two years ago, Van Eck’s Market Vectors made a big splash with its introduction of Small Cap Brazil (BRF). It was the second highly anticipated small cap country fund, as Claymore’s (Guggenheim) Small Cap China (HAO) had been an instantaneous success. Of course, the investment community didn’t embrace every small country offering with unbridled fervor. For instance, WisdomTree’s [...] Continue Reading...
In my 3/18/2011 feature, “Why Russia ETFs Are Receiving So Much Love,” I discussed several reasons for the recent investment success. They included: (1) non-OPEC oil and gas exposure during Middle East rebellions, (2) large weighting in iron/steel for Japan’s rebuilding, and (3) substantial GDP contribution by Russia to global growth. Yet Russia isn’t the only BRIC component that’s been traveling a comeback trail. [...] Continue Reading...
One of the reasons cited for the underperformance of several BRIC-related ETFs? Out-of-control inflation. Yet the data on rising consumer prices aren’t supportive of the simplistic analysis. Consumer Price Data For BRIC Nations % Rise Year-Over Year Expected 2011 China 4.9% 5.0% Brazil 6.0% 6.0% India 9.3% 7.4% Russia 9.6% 9.1% Inflation in Russia appears far more damaging than in other emerging market giants. And yet, investing in Russia has been hugely rewarding. In [...] Continue Reading...
The worldwide bull market for stocks turned 2 years old on March 9, 2011. And so far, there’s been two meaningful corrections — one in 2009 and one in 2010. Some in the media have suggested that the Dow might not experience any significant pullback… like the way U.S. stocks behaved in 1995. Others believe that stock assets will get [...] Continue Reading...
Nearly every visitor to the CNBC microphone is making the same proclamation; that is, emerging markets can’t handle commodity price inflation as well as developed markets. The problem with this analysis is the conclusion that each is providing. Specifically, stock assets from the U.S, Japan and the Euro-zone will outperform the industrializing world. This has been true for the previous 6 [...] Continue Reading...
