Core EM Equity
U.S. Investors are Underweight Emerging Markets
Our analysis shows that U.S. investors have about a 19% allocation to emerging markets (EM) within international equity portfolios, while the MSCI EM Index market capitalization accounts for 22% of the MSCI ACWI ex-U.S. Index. U.S. investors are therefore 3% underweight EM equities. Before the 2008 financial crisis, U.S. investors were collectively overweight EM equities. At that time, global economic and corporate earnings growth were strong and return on equity was rising. As these factors deteriorated, so did investors' appetite for EM equities. An improvement in growth and profitability might persuade investors to show some love to EM equities....
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Emerging Market Equities - The Price Is Right
In examining the Shiller P/E ratio, the valuation of emerging market equities is one standard deviation below its long-term average and almost back to the 2008 Great Financial Crisis lows and below 2005 levels. In the past, the equity market has moved higher from these prevailing levels of valuation....
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A Brave New World
February 25, 2014
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Categories:
Investment Strategy,
Emerging Markets,
Frontier Markets,
Core EM Equity
Smaller, less developed Emerging Market (EM) economies, such as those that operate "Beyond the BRICs", and Frontier Market (FM) economies have the potential to generate growth that has been scarce since the financial crisis of 2008. However, investors face challenges accessing these investment opportunities due to the trade-off between portfolio liquidity and diversification. In this note, we identify and explore investment opportunities in Beyond BRIC EM and FM economies, which in our view offer the growth and diversification characteristics that are missing in mainstream EM indices today, as well as ways investors can access this exposure....
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The Emerging Market Benchmark Bear Hug
The continued maturation of emerging markets has allowed wealth managers to make choices beyond broad benchmarks, thereby differentiating client portfolios and their own value propositions....
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Emerging Market Volatility: Remedies for the Chronically Underweight
Wealth managers often contemplate aligning emerging market (EM) allocations with global market capitalization weights. Yet such increases may come at the price of higher overall portfolio volatility. Constructing EM portfolios with lower risk profiles may not only allow for more meaningful EM allocations, but can also help wealth managers differentiate their value propositions....
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Disclosure
Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility and lower trading volume. Please call +1 888 800 4347 or click here access a prospectus online. Investing involves risk, including possible loss of principal.
Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses, which could reduce returns. Indexes are unmanaged and one cannot invest directly in an index. Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance data may be higher or lower than actual data quoted. For the most current index performance data please call + 1 888 800 4347.
The content of this material is presented for general information purposes only. The statements and opinions expressed are those of the author and are as of the date of this material. All information is historical and not indicative of future results, and subject to change. Readers should not assume that an investment in the securities mentioned above was or would be profitable in the future. This information is not a recommendation to buy or sell. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and it should not be relied on as such or be the basis for an investment decision. This material may include estimates, projections and other "forward-looking statements". Emerging Global Advisors, LLC assumes no duty to update any such statements. Due to numerous factors, actual events may differ substantially from those presented. Past performance does not guarantee future results.
EGA and EGShares Funds are distributed by ALPS Distributors, Inc. Emerging Global Advisors acts as the investment advisor to the EGShares Funds. ALPS and Emerging Global Advisors are unaffiliated entities.
Emerging market investments involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, from economic or political instability in other nations or increased volatility and lower trading volume. Please call +1 888 800 4347 or click here access a prospectus online. Investing involves risk, including possible loss of principal.
Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect any management fees, transaction costs or expenses, which could reduce returns. Indexes are unmanaged and one cannot invest directly in an index. Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance data may be higher or lower than actual data quoted. For the most current index performance data please call + 1 888 800 4347.
The content of this material is presented for general information purposes only. The statements and opinions expressed are those of the author and are as of the date of this material. All information is historical and not indicative of future results, and subject to change. Readers should not assume that an investment in the securities mentioned above was or would be profitable in the future. This information is not a recommendation to buy or sell. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and it should not be relied on as such or be the basis for an investment decision. This material may include estimates, projections and other "forward-looking statements". Emerging Global Advisors, LLC assumes no duty to update any such statements. Due to numerous factors, actual events may differ substantially from those presented. Past performance does not guarantee future results.
EGA and EGShares Funds are distributed by ALPS Distributors, Inc. Emerging Global Advisors acts as the investment advisor to the EGShares Funds. ALPS and Emerging Global Advisors are unaffiliated entities.
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