- "Our view is that we are in the beginning stages of the next contractionary cycle, and this cycle, similar to 1997-1998, is commencing on the emerging market side of the global imbalance," say the managers of Fortress' Convex Asia Fund. "We believe we are three weeks into what is likely an 18-plus month contractionary period, using past cycles as a guide.”
- In this, the team at Fortress is joining a number of other investors, including Ray Dalio, who says the impact of EM losses will be more widespread than previous crisis thanks to more money now invested in those markets.
- The Convex fund gained 3.2% in August, bringing YTD returns to 1.4%.
- "Now is the time to be hedged," says Convex, predicting a "wild" next 18-24 months, particularly with the upcoming U.S. presidential election.
- ETFs: EEM, VWO, EDC, EDZ, SCHE, IEMG, EMF, MSF, EEV, ADRE, EET, EUM, GMM, DBEM, EEME, EMCR, FEM, XSOE, EWEM, HEEM, EMLB, EMSA, EMFT, KEMP, LLEM, GEM, KLEM