By Tim Seymour
Staying with the emerging market vs. domestic market trade, UBS is out with their Global Emerging Market Strategy Report, otherwise known as GEMS.
As I’ve highlighted since October, the emerging market trade is solid if not strong, with Asia being a beacon of light in the storm this week. Japan for example, had the strongest interest this week.
Asian flows continue to rebound, and if we are going to continue to see the rebound rally in emerging markets — China needs to lead it. Check out the iShares FTSE China 25 Index Fund (FXI):
Dedicated money, as opposed to ETFs, were also the winners which is a good sign that more committed allocations are being made to mangers in the specific regions as opposed to whimsical ETF flows which have tended to dominate. ETF inflows are around $72 million compared to $518 million inflow for non-ETF assets according to the UBS GEMS report.
EMEA (Europe, Middle East and Africa) continue to lag in the face deteriorating economic conditions.
The ASEAN countries (Association of Southeast Asian Nations) such as Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, and Thailand are still by far the best bid. And the “CIVETs” trade in the emerging markets of Columbia, Indonesia, Vietnam, Egypt, Turkey, has beaten every index.
CIVETs ETFs:
RWG - Columbia Large-Cap Growth Equity Strategy Fund
IDX - Market Vectors Indonesia Index ETF
VNM - Market Vectors Vietnam ETF
EGPT - Market Vectors Egypt Index Fund
TUR - iShares MSCI Turkey Investable Market Index Fund
