Emerging Markets

JamesU

gadgetmind wrote: »

I was looking for ways to get exposure to Brazilian infrastructure to benefit from various sporting events there over coming years. There's BRXX, which I'm watching but not holding

Not just sporting events though, from memory latin America have around $500 billion in infrastructure development planned to 2015-2016. But BRXX is an etf of course.

JamesU

gadgetmind

bigadaj wrote: »

I work for an Atkins competitor and would be careful, look at mouchel and wyg, both effectively bust.

And maybe your employer? Do your upper management walk of water? Ultimately every investment carries risk.

It's because of risk that I stick to max 5% per company, and do a 50:50 if I really can't decide.

gadgetmind

JamesU wrote: »

latin America have around $500 billion in infrastructure development planned to 2015-2016.

I'm big on global infrastructure. It's held up well during 2011 and has lots of income/upside promise.

But BRXX is an etf of course.

Phew, that's lucky, imagine if it was an open-ended fund (mis)managed by over-paid fat cats!

bigadaj

Yup, it's all opinion at the end of the day. The engineering consultancy sector is under some pressure, but as you say it is sorting the wheat from the chaff that is important. We are a lot smaller than Atkins and niche,and have dropped from twenty per cent profits to less than ten in the last few years.

sabretoothtigger

Under pressure where though. Because I have Hyder which is doing well I think in mostly Asian business. It is a UK firm but they went where the work was and most of the operation is Australia and surrounding countries now.
I think they will continue to do well. The success of ATK is mostly the same basis in growing economies, if they come back down it'll be the same old worries about the West

moneylover

gadgetmind wrote: »

I use the Vanguard Emerging Markets Index tracker, which has a TER of 0.55%.

Do you pay HL £2 a month for it or have you got it elsewhere?
How has it done compared with First State and Aberdeen that have been discussed on this thread, please?

gadgetmind

moneylover wrote: »

Do you pay HL £2 a month for it or have you got it elsewhere?

BestInvest.

How has it done compared with First State and Aberdeen that have been discussed on this thread, please?

Please mention those two because they have faired relatively well over recent years. Other EM funds have done worse, some much worse, simply because their bets on which EM countries, sectors and companies would thrive/survive the market conditions (which no-one could predict) were not as fortuitous.

In coming years, FS and Aberdeen might continue to do well, or we might see them slowly fall out of favour as they regress to mean because those areas they aren't holding with some weight surge back.

Do you feel lucky?

Linton

gadgetmind wrote: »

BestInvest.



Please mention those two because they have faired relatively well over recent years. Other EM funds have done worse, some much worse, simply because their bets on which EM countries, sectors and companies would thrive/survive the market conditions (which no-one could predict) were not as fortuitous.

In coming years, FS and Aberdeen might continue to do well, or we might see them slowly fall out of favour as they regress to mean because those areas they aren't holding with some weight surge back.

Do you feel lucky?

Perhaps the fund managers would strategically move their investments under these circumstances. They do tend to, that's what they are for. Such global movements tend to be relatively long term rather than random.

On the other hand, a tracker being invested on the basis of current market capitalisation would rather be invested in a massive bank in a stagnating country than, say a dynamic telecoms company in a rapidly expanding one.

Another factor that concerns me about EM trackers is their focus on large companies means that they are heavily into global industries such as finance, oils and miners. These may well be good investments but are more likely to reflect the global economy rather than EM progress. When I invest in EM its the latter I want, if I want to track the global economy there are better ways of doing it.

One thing does confuse me about EM trackers is that being based on market capitalisation why dont they hold say 50% of their investments in China/HK? Those markets according to Bespoke Investment's list comprise some 50% of Global EM market capitalisation? Why does the L&G EM tracker have its largest tranche of holding in Brazil, nearly twice its holding in China, a market 5 times larger?

gadgetmind

Linton wrote: »

Perhaps the fund managers would strategically move their investments under these circumstances. They do tend to, that's what they are for.

And sometimes they get it right, and others they get it totally wrong. I've been saving HL's woffle about some of their "Wealth 150" funds so that I can compare it in 3, 5 and 10 years time with what they'll saying then.

For example, a year ago, they had nothing but good things to say about "Allianz RCM Bric Stars" (where do they get these names!) but now they say - "The fund has been removed from our Wealth 150 list. Our analysis suggests deterioration in stock selection, particularly in India and China, is a key reason for its underperformance."

So, great for those who were lucky enough to pick a different fund, not so good for those who didn't.

a dynamic telecoms company in a rapidly expanding one.

The tracker would also be invested in that company. And remember that dynamics can work both ways!

These may well be good investments but are more likely to reflect the global economy rather than EM progress. When I invest in EM its the latter I want, if I want to track the global economy there are better ways of doing it.

I do share this concern, and it does bother me that (for instance) a Pacific tracker is dominated by Australia, and the diggers dominate there. I still went for a holding in such a tracker as I'm wanting to tilt my holdings in that direction rather than bet the farm.

Why does the L&G EM tracker have its largest tranche of holding in Brazil, nearly twice its holding in China, a market 5 times larger?

Dunno, what index does it track? I went for the Vanguard EM tracker as it tracks the MSCI EM Index, so China 17.5%, Korea 14.8%, Brazil 14.6%, Taiwan 10.9%, etc. (last time I looked)

Linton

gadgetmind wrote: »

And sometimes they get it right, and others they get it totally wrong. I've been saving HL's woffle about some of their "Wealth 150" funds so that I can compare it in 3, 5 and 10 years time with what they'll saying then.

For example, a year ago, they had nothing but good things to say about "Allianz RCM Bric Stars" (where do they get these names!) but now they say - "The fund has been removed from our Wealth 150 list. Our analysis suggests deterioration in stock selection, particularly in India and China, is a key reason for its underperformance."

So, great for those who were lucky enough to pick a different fund, not so good for those who didn't.



The tracker would also be invested in that company. And remember that dynamics can work both ways!



I do share this concern, and it does bother me that (for instance) a Pacific tracker is dominated by Australia, and the diggers dominate there. I still went for a holding in such a tracker as I'm wanting to tilt my holdings in that direction rather than bet the farm.



Dunno, what index does it track? I went for the Vanguard EM tracker as it tracks the MSCI EM Index, so China 17.5%, Korea 14.8%, Brazil 14.6%, Taiwan 10.9%, etc. (last time I looked)

I thought the forum generally agreed that the wealth 150 was little more than a marketing exercise - seems a bit weak to use it to bolster your case! The Allianz fund is hardly one would just happen to pick - it isnt even in the IMA Global EM sector.

The L&G tracker follows the FTSE All World Emerging Index. Unfortunately the fund has only been running about a year so its difficult to see how well it does it and how the fund generally performs. However on the little data available it seems to follow the IMA EM fund average rather better than the index.

How can we have 2 apparently very different indexes in the same sector? Only one can be optimal long term. Which is the "True" index?