investing in emerging markets?

Doshwaster

Not only a Emerging Markets more volatile there are also bigger currency risks so what you make in capital growth can be lost is the currency goes in the opposite direction.
I'm about 5% EM in my S&S ISA and 0% in my pension though looking to increase those to 10% and 5% respectively

eastmidsaver

Doshwaster said:

Not only a Emerging Markets more volatile there are also bigger currency risks so what you make in capital growth can be lost is the currency goes in the opposite direction.
I'm about 5% EM in my S&S ISA and 0% in my pension though looking to increase those to 10% and 5% respectively

yes,  it's probably better to have it as a satellite investment, rather part of your main portfolio.

maxsteam

It's an interesting term, "Emerging Markets". I suspect that the sector would be less popular if called "Third World Markets" or "Markets in Underdeveloped Nations". Perhaps the sector should be renamed in the bad years as "Fading Markets"? Using the word "emerging" suggests, inappropriately, that the markets will only move in one direction.

Voyager2002

maxsteam said:

It's an interesting term, "Emerging Markets". I suspect that the sector would be less popular if called "Third World Markets" or "Markets in Underdeveloped Nations".

Such countries are scarcely investible, and any fund that invested in them would be called "Frontier" rather than "Emerging" markets.

Unlike other posters on this thread, I see the so-called emerging markets as being where most of the action is, China above all.

maxsteam

Voyager2002 said:
where most of the action is, China above all.

Haha. I have travelled in China. Mentioning an interest in investing in shares is unwise. It usually leads to an introduction to an uncle who is a successful businessman with big plans. There are certainly plenty of opportunities but, like in many other countries, foreigners are seen as an easy mark.

I did notice lots of Luckin Coffee shops when I was there. It's a company worth researching before investing in China.

Personally I regard China as a rich country. I certainly saw more Ferraris, Porsches and Lamborghinis than I expected. Different funds have different lists but it is possible to limit investment to just China if that is what you want. While China is generally included as an emerging market, the lists invariably include countries which are also categorised as third world and underdeveloped.

The point that I was making was that most indices have very dull names, often three or four letter acronyms, while the term "Emerging Markets" falsely implies that the markets will move in only one direction.

Chickereeeee

China is often included in both Asia and Emerging Markets categories, so it is easy to get a larger holding than you think you have.

Voyager2002

maxsteam said:

Voyager2002 said:
where most of the action is, China above all.

Haha. I have travelled in China. Mentioning an interest in investing in shares is unwise. It usually leads to an introduction to an uncle who is a successful businessman with big plans. There are certainly plenty of opportunities but, like in many other countries, foreigners are seen as an easy mark.

The point that I was making was that most indices have very dull names, often three or four letter acronyms, while the term "Emerging Markets" falsely implies that the markets will move in only one direction.

According to Paul Theroux (in 'Riding the Iron Rooster'), "we can always fool a foreigner" is a well-known Chinese saying. So I have never mentioned an interest in shares investment during my time in China, and until recently I gained exposure to this market via passive investment only: I think that even Antony Bolton had a hard time in the early years of the China Special Situations trust that he managed. There are great opportunities there, but neither I nor any manager are in a position to distinguish them from dross. Having said that, I do regret that I declined to invest in Ten Cent back in 2010.

maxsteam

Voyager2002 said:
Having said that, I do regret that I declined to invest in Ten Cent back in 2010.

It's close to a state monopoly. If you imagine WhatsApp and every other messenger app rolled into one with a payments system that is many times more popular than PayPal, with government protection and support, it's like the Chinese equivalent of the BT of many years ago.

chiang_mai

I invested 10% of my holdings in JPM EM about a year ago and that turned out to be one of my best performing funds ever. Last month I took profit and trimmed my holding back from 16% to the current 10%, I also hold separate investments in the form of LTF's in Thailand. I have no problem holding EM's but I'm also heavily invested in Developed Asia. I try and hold no more than 15% in any one region with the exception of the US which is the major global market where I hold 32% currently.  A note on JPM EM: JPM EM has a history of stock splits, their most recent in November was 10:1. 

chiang_mai

Chickereeeee said:

China is often included in both Asia and Emerging Markets categories, so it is easy to get a larger holding than you think you have.

1. "There’s no shared definition of an emerging market. MSCI, FTSE and S&P, the main index compilers, all use different measures. Two of them think South Korea is developed and one says it is emerging. They disagree on Poland too. And that’s before we’ve even got to frontier markets, where there’s even less common ground. An emerging stock market is, by the way, not the same thing as an emerging economy".

https://www.telegraph.co.uk/business/2021/03/08/think-know-emerging-markets-think/