When is an emerging market not an emerging market...?

[Deleted User]

I have never seen country origin of a company reported based on the location of an exchange where the stock is trading.  Many companies are interlisted, what would they do with them? Double count?

More likely that the fund owns a US traded Emerging Market ETF. Even then it’s misleading. 

Either way, one should be able to check the actual holdings within the fund. That should give the answer. I certainly wouldn’t expect BlackRock to buy US firms for an EM fund. 

grumiofoundation

Bimbly said:

...when it's in the Emerging Markets equity fund in my pension!

What do you think the biggest holding in this fund might be. China, maybe?

No, it's the USA!

As posters have said seems to depend on where you look and they way it is reported

If you look at Vanguard Emerging market lists countries as 39% China, 13.5% Korea, 12.8% Taiwan and so on. No Hong Kong, No USA. 
https://www.vanguardinvestor.co.uk/investments/vanguard-emerging-markets-stock-index-fund-gbp-acc/portfolio-data

If you look at the same fund on HL is lists as ~15% China, ~12% US, ~ 12% Hong Kong
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-emerging-markets-stock-index-accumulation/fund-analysis/geographical-analysis

bowlhead99

grumiofoundation said:

Bimbly said:

...when it's in the Emerging Markets equity fund in my pension!

What do you think the biggest holding in this fund might be. China, maybe?

No, it's the USA!

As posters have said seems to depend on where you look and they way it is reported

If you look at Vanguard Emerging market lists countries as 39% China, 13.5% Korea, 12.8% Taiwan and so on. No Hong Kong, No USA. 
https://www.vanguardinvestor.co.uk/investments/vanguard-emerging-markets-stock-index-fund-gbp-acc/portfolio-data

If you look at the same fund on HL is lists as ~15% China, ~12% US, ~ 12% Hong Kong
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-emerging-markets-stock-index-accumulation/fund-analysis/geographical-analysis

Yes unfortunately different places report things differently depending how they choose to cut the data.  For example, Vanguard's own factsheet for that fund doesn't show an allocation to US, but on the portfolio list  you can see Alibaba's ADRs are the second biggest holding and JD.com, Pinduoduo, NIO and Baidu's ADRs are all up there in the top ten or twenty too. Those ADRs only trade on the US markets (NYSE or NASDAQ) so you could imagine that some places with simplistic software would  attribute the data to the country whose stock exchange a company is listed rather than the underlying country where the company is operating (the latter being the way MSCI or FTSE would do it; Alibaba isn't in the North America index but is in China index).

This came up on another thread recently, HL's data can appear pretty dodgy/ useless sometimes - for example in your link above it is analysing the holdings where the company is listed (Alibaba listed in US, Tencent in HK etc) but in other situations they use country of domicile - for example if you look at a HSBC FTSE100 or FTSE250 tracker on HL's site, whose whole reason to exist is to track UK listed companies, they'll say that the 'UK equity' allocation is only 89% for the FTSE100 and 66% for the FTSE250.  That's the result of pulling out 'direct property and REITs' as a separate category and then saying some of the holdings should be Ireland or Netherlands (presumably based on country of incorporation) while the FTSE250 has 26% 'unclassified' - presumably offshore holding companies in Channel Islands, BVI, Cayman etc.

Thrugelmir

cloud_dog said:

 I'm not sure China still falls under the EM concept.  I appreciate it may fall under the definition of the defined index but, even so....

The disappearance of Jack Ma should be sufficient warning of where the real power lies. China has it's own version of capitalism and it's far removed from that of the USA. 

Bimbly

Linton said:

It would help if you told us the name of the fund.

Av MyM BlackRock Emerging Markets Equity (Aquila C)

Thanks for all your intelligent responses. I'm going to look at some of the other funds and decide how to proceed. Clearly a bit of a minefield. But I wanted to make sure I had a stake in the whole world, which includes big economies like China, whether they deserve their 'emerging market' target or not. When my other funds charge 0.21%, it's a bit of a jump to go with a fund charging 0.96%, but I'm giving it due consideration.

Linton

Bimbly said:

Linton said:

It would help if you told us the name of the fund.

Av MyM BlackRock Emerging Markets Equity (Aquila C)

Thanks for all your intelligent responses. I'm going to look at some of the other funds and decide how to proceed. Clearly a bit of a minefield. But I wanted to make sure I had a stake in the whole world, which includes big economies like China, whether they deserve their 'emerging market' target or not. When my other funds charge 0.21%, it's a bit of a jump to go with a fund charging 0.96%, but I'm giving it due consideration.

From Trustnet the Blackrock em equity fund is 
39% china
13.5% s korea
12.8% Taiwan
9.3% India
etc

so perhaps you should stay with it.

Thrugelmir

Bimbly said:

Linton said:

It would help if you told us the name of the fund.

Av MyM BlackRock Emerging Markets Equity (Aquila C)

Thanks for all your intelligent responses. I'm going to look at some of the other funds and decide how to proceed. Clearly a bit of a minefield. But I wanted to make sure I had a stake in the whole world, which includes big economies like China, whether they deserve their 'emerging market' target or not. When my other funds charge 0.21%, it's a bit of a jump to go with a fund charging 0.96%, but I'm giving it due consideration.

Global indexes should have a far greater exposure to China. They don't as the risks are considerable. At the core the allegiance to the State. Which takes precedence over anything else. Therein lies the issue with Emerging Markets. Standards of corporate governance, accounting, regulatory supervision, rife corruption etc fall well short of the standards in developed markets. 

[Deleted User]

Bimbly said:

Linton said:

It would help if you told us the name of the fund.

Av MyM BlackRock Emerging Markets Equity (Aquila C)

Thanks for all your intelligent responses. I'm going to look at some of the other funds and decide how to proceed. Clearly a bit of a minefield. But I wanted to make sure I had a stake in the whole world, which includes big economies like China, whether they deserve their 'emerging market' target or not. When my other funds charge 0.21%, it's a bit of a jump to go with a fund charging 0.96%, but I'm giving it due consideration.

This fund does not hold any US equity. Its a problem with the information source you are using. Look at the top 10. https://www.trustnet.com/factsheets/p/0lul/av-mym-blackrock-emerging-markets-equity-aquila-c-pn

Moe_The_Bartender

Thrugelmir said:

cloud_dog said:

 I'm not sure China still falls under the EM concept.  I appreciate it may fall under the definition of the defined index but, even so....

The disappearance of Jack Ma should be sufficient warning of where the real power lies. China has it's own version of capitalism and it's far removed from that of the USA. 

He has reappeared now.

garmeg

Moe_The_Bartender said:

Thrugelmir said:

cloud_dog said:

 I'm not sure China still falls under the EM concept.  I appreciate it may fall under the definition of the defined index but, even so....

The disappearance of Jack Ma should be sufficient warning of where the real power lies. China has it's own version of capitalism and it's far removed from that of the USA. 

He has reappeared now.

But he seems to have been "reprogrammed".