Tag: ETF emerging market

Over time, the accumulation of reserves and a stronger structural/institutional backdrop should lead to a major decline in sovereign spreads, limiting the extent of potential “flare-ups” in the future.

Companies within ARKQ are focused on and are expected to substantially benefit from the development of new products or services, technological improvements, and advancements in scientific research

Combine that with the point that the Adani Group consists of seven listed entities and it’s not surprising that the Hindenburg report cast a pall over the Indian investment thesis. In fact, DGIN is highly relevant in the India

Opportunity Overview Egypt is one of the most intriguing smaller emerging markets, and it is often overlooked by emerging market investors. Egypt was on my radar, particularly in June 2020, and this also

In addition to the macroeconomic effects of rising inflation, the sector had its own issues isolated to Chinese big tech, such as heavier regulatory measures and a resurgence in COVID-19 cases. That said, rather than

As a Frontier Market fund, FM has holdings in countries not typically seen by investors. For the most part the frontier market sector is made up of countries with fairly stable economies, reasonably functional

EMCR seeks investment results that correspond generally to the performance, before fees and expenses, of the Solactive ISS Emerging Markets Carbon Reduction & Climate Improvers Index NTR. EMSG,

Deutsche X-trackers Harvest CSI 300 China A-Shares ETF ( NYSEARCA: ASHR ) uses a plain vanilla model of investing in the 300 largest Chinese stocks. ASHR holds a basket of 300 of China’s largest

The significant advantage of the Gemalink port is (1) it is a deep seaport which can accommodate two larger container vessels at once and (2) its location at the mouth of the Thi Vai River which runs upstream to Ho Chi

KBND follows the Bloomberg China Inclusion Focused Bond Index and primarily holds Chinese sovereign debt as well as investment-grade corporate bonds, indicating credit risk is relatively tame compared to that

The real estate market is important for all economies, and especially so for China as it has been the cornerstone for many people’s wealth creation. Our more bullish stance was based on China starting to emerge

While the country is working out its current economic issues with the help of its government, it offers investors a window to extract value.

2022 was a challenging year for equity markets, as central banks around the world hiked interest rates in response to surging inflation. U.S. equities were affected by the souring sentiment, with the S&P Composite 1500® down 17.8% in 2022. More broadly, all 25 countries in the S&P Global Developed BMI declined in U.S. dollar terms since the end of 2021, while 15 out of 24 S&P Emerging BMI countries declined by the same measure. However, Latin American equities had a stronger year than most regional markets: Exhibit 1 shows that equity markets in Argentina, Chile, Brazil, and Peru increased in U.S. dollar terms last year.

Exhibit 1 shows that equity markets in Argentina, Chile, Brazil and Peru increased in U.S. dollar terms last year.
Sector exposures were a key reason for performance differences in 2022. Exhibit 2 shows that many Latin American countries benefitted from having more (less) exposure to out- (under-) performing GICS® sectors compared to the S&P 1500™. Indeed, Latin American countries typically had greater weight in Energy, Financials, Materials and Consumer Staples, and less exposure to Information Technology and Consumer Discretionary.

Exhibit 2 shows that many Latin American countries benefitted from having more (less) exposure to out- (under-) performing GICS® sectors compared to the S&P 1500™.
Although the out performance of domestic equity markets may be well received by investors across Latin America, some may wish to take a longer-term perspective. Over long-term horizons, the S&P Composite 1500 showed higher returns and lower risk compared to the country-specific indices. Exhibit 3 shows the rolling five-year risk-adjusted returns, where U.S. equities posted a higher return per unit of risk.

Exhibit 3 shows the rolling five-year risk-adjusted returns, where U.S. equities posted a higher return per unit of risk.
Combined with the less-than-perfect correlation between the performance of the S&P Composite 1500 and various countries in Latin America, it is unsurprising that Exhibit 4 shows that adding a U.S. equity allocation to a domestic equity allocation could have improved risk-adjusted returns, historically.

Exhibit 4 shows that adding a U.S. equity allocation to a domestic equity allocation could have improved risk-adjusted returns, historically.
As a result, Latin American equity indices outperformed in 2022, as they benefitted from having less exposure to sectors that were most affected by higher interest rates. However, U.S. equities may still be relevant to investors in Latin America. Combining U.S. equity exposures with a domestic equity allocation could have improved risk-adjusted returns, historically, and the U.S. market’s distinct sector exposures could help mitigate domestic sector biases.