Dimensional Winning in Emerging Markets: Riskless Return – Bloomberg 07-08-14

Salient to Investors:

Karen Umland at the DFA Emerging Markets Small Cap Portfolio Fund is slightly overweight India, and had 15 percent of holdings in Taiwan, over 14 percent in South Korea, over 14 percent in China, and 9.2 percent in Brazil at the end of Q1. Umland dislikes Russia and Egypt because of lack of market transparency and trading volume. Umland and co-manager Joseph Chi say companies with very low profits and high relative prices are chronic underperformers.

Patricia Oey at Morningstar said limited variation in country and industry weightings can hold back a fund so the DFA fund may outperform at times, and underperform at other times.

Read the full article at http://www.bloomberg.com/news/2014-07-09/dimensional-winning-in-emerging-markets-riskless-return.html

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World Economy in Best Shape for 18 Months, Poll Shows – Bloomberg 11-29-12

Salient to Investors:

Andrea Guzzi at IST Investmentstiftung fuer Personalvorsorge said the global economy is recovering and healing, thanks to the US and the emerging markets – more people are becoming wealthy, less and less are poor. Guzzi said many countries have oversized banking sectors.

Gala Prada at Fiatc Mutua de Seguros y Reaseguros expects QE4 or more asset purchases if the economy doesn’t improve.

Christian Thwaites at Sentinel Investment says US companies have better profit potential, balance sheets and access to capital.

In a Bloomberg global poll:

  • Two-thirds of investors see the global economy as either stable or improving. the most since May 2011.
  • The US offered the best opportunity over the next year for the eighth straight quarter, China ranked second, and the EU offering the worst returns.
  • Over 1 in 3 forecast say equities offer the best returns in the coming year, with real estate second, and bonds offering the worst returns.
  • 75% expect the Fed to begin outright purchases of Treasurys after its plan for swapping short-dated securities for longer-dated ones expires. 40% expect the Fed to continue QE3 into 2014.
  • 70% expect large banks to reduce payrolls further in the next year, citing regulatory changes.
  • 75% expect a short-term agreement to avert the fiscal cliff. The OECD says the world economy would go into recession if the US fails to act.
  • Near 50% of investors plan to increase equities over the next 6 months, while more than 50% expect the S&P 500 to will rise during the period.
  • More than 60% say housing values will be higher in six months.
  • 12 percent see commodities as the best-performing asset class over the next year versus 18 percent in September.
  • 48% intend to reduce T-bonds over the next 6 months, while 50% say Treasuries are safer than AAA-rated corporates.
  • Over 40% say EU markets offer the least opportunities over the next year, 23% say Japan, 17 percent say the Middle East.
  • 40% are less likely to put money into Egypt.
  • 50% don’t expect a military strike against Iran in 2013.

Read the full article at http://www.bloomberg.com/news/2012-11-29/world-economy-in-best-shape-since-2011-investors.html

Egyptian Stocks Lose World’s Best Performer Spot Amid Unrest – Bloomberg 11-26-12

Salient to Investors:

Khalil el-Anani at Durham University said the Mursi decrees were a big blow to the revolution, the transitional period and democracy and could have dire consequences on the political scene.

Religare Capital Markets said the political instability will probably be resolved soon.

The  EGX 30 Index trades at 1.25 times book versus 2.43 times book for Morocco’s Madex Free Float Index and 1.72 times for Saudi Arabia’s Tadawul All Share Index.

Yazan Abdeen at ING Investment Mgmt said the lack of stability will not attract foreign investors regardless of the underlying prices of the stocks.

Read the full article at http://www.bloomberg.com/news/2012-11-25/egyptian-stocks-lose-world-s-best-performer-spot-amid-clashes.html