Ivy Funds Adds Emerging Markets Debt Fund

Ivy Funds today launched the Ivy Emerging Markets Local Currency Debt Fund. Subadvised by Pictet Asset Management, a global leader in emerging market debt investing, the fund provides investors the opportunity to capture fixed income opportunities from a select group of emerging market economies.  “At a time when emerging markets exert growing importance across the globe, this fund allows Ivy Funds to further engage advisors and investors, allowing them to tap debt securities through a fund that fits well within our overall product lineup,” said Thomas W. Butch, president and CEO of Ivy Funds Distributor, Inc. “And, by partnering with Pictet, we provide investors with a deep and experienced team that is well-known as a leader in this asset class.”

http://tinyurl.com/lfv4m9s

-Igor P Purlantov

Emerging Stocks Rise as Russia Sanctions Dismissed

Emerging-market stocks rebounded from a month-low as investors dismissed a new round of Russia sanctions and phone shares surged in China. All but one currency in developing-Europe rose versus the dollar, led by the ruble.  The Micex Index added as much as 1.3 percent in the second day of gains in Moscow and the Russian currency headed for the steepest appreciation in almost two weeks.China Mobile Ltd. soared the most since 2011 in Hong Kong, while China Telecom Corp. posted its biggest two-day rally since August 2012 after reporting higher profit.Turkey’s Borsa Istanbul 100 Index jumped 0.6 percent as Ford Otomotiv Sanayi AS climbed after net income topped estimates.

http://tinyurl.com/mtstvj4

-Igor P Purlantov

30 Ways To Invest In Emerging Markets

At first blush it sounds a little gimmicky.  Thirty ways to buy into emerging markets without actually having to invest in emerging market companies: every investor knows the best way to be exposed to China is to invest in Chinese companies.  And every global investor knows there are multinational companies that garner a third or more of their revenues from outside their home base —Europe, Japan, the U.S. That’s what international and global mutual funds are for. You invest in General Motors not just because of U.S. car sales, but because of China and Brazil’s.

http://tinyurl.com/lsa3jtk

-Igor P Purlantov

Lilly Eyes Emerging Markets in Novartis

The purchase of Novartis' animal-health business will strengthen Eli Lilly's hand in emerging markets, tapping into growing demand there for protein-rich diets and household treatments for pets, top executives of the U.S. company said.  As part of a multibillion-dollar revamp announced earlier on Tuesday, Swiss drugmaker Novartis said it would sell its animal-health arm to Indianapolis-based Lilly for about $5.4 billion, while also swapping assets with GlaxoSmithKline.

http://tinyurl.com/mdfxvls

-Igor P Purlantov

Will Emerging Markets Shake Off “Acronym-itis”?

“Emerging is back”, although not as we know it, according to our guest today, BNP Paribas Investment Partners’ vice-chairman and LinkedIn influencer William De Vijlder. Having suffered more outflows in the first six weeks of 2014 than in the whole of 2013 on the back of crises in Turkey and Ukraine, as well as evidence of faltering growth in some of the world’s erstwhile superstar economies such as Brazil, emerging funds are pulling the cash back in. Emerging-market credit spreads are around their tightest in nearly a year, as a greater degree of confidence and stability return to some of these very volatile markets.

http://tinyurl.com/l3lsr5p

-Igor P Purlantov

Private Equity Shifts Gears In Emerging Markets

After surveying another year of disappointing results from their emerging market investments in 2013, many private equity (PE) investors that had enthusiastically piled into the big developing economies of Brazil, Russia, India and China (the BRICs) are rethinking their emerging market strategies.  As we discuss in Bain & Company’s 2014 Global Private Equity Report, the problem PE faces in emerging markets is stark: General partners (GPs) are failing to deliver on the job their limited partners (LPs) hire them to do—to generate market-beating returns. Indeed, returns of emerging market PE funds have been trending lower for nearly a decade. Even the best performers’ results have dropped steadily from their vintage peak.

http://tinyurl.com/mjuz2bs

-Igor P Purlantov

Emerging Markets in a "Sweet Spot"

Emerging markets get a nod this weekend from fundamental indexing guru and Research Affiliates CEO Rob Arnott for being “in the sweet spot” of long-term demographic change and short-term valuation. The comments come in colleague Lawrence C. Strauss’ interviewwith Arnott in the print edition of Barron’s.


http://tinyurl.com/m4ha5hn

-Igor P Purlantov

Versatility is Key to Emerging Markets

Investors who put money into emerging markets at the start of 2013 have had a miserable time. While shares in developed country markets forged ahead on continuing evidence of economic upturn, emerging markets went into reverse, on what is now a wearisomely familiar set of excuses: disappointment over macro-economic data, volatility (any remotely concerning turn of events world-wide is the trigger for sell-off) and capital repatriation to Western financial markets on expectations that interest rates are likely to rise sooner than expected.

http://tinyurl.com/l2grdzy

-Igor P Purlantov

A Low-Volatility Approach To Emerging Markets

iShares MSCI Emerging Markets Minimum Volatility (EEMV) is suitable for use as a small core holding in a diversified portfolio and is a solid alternative to a cap-weighted emerging-markets index fund. This fund tracks an index that selects about 200 stocks from its parent index (the MSCI Emerging Markets Index) to form a low-volatility portfolio. Low-volatility strategies seek to exploit the observed phenomenon that portfolios with smaller price fluctuations tend to outperform portfolios with larger price fluctuations over the long term.

http://tiny.cc/vgkiex

-Igor P Purlantov

Emerging Markets Likely to Benefit Later in 2014

Emerging markets are likely to benefit later in the year from stronger growth in the United States and Europe despite the current cloud cast by slowing economic growth in China and geopolitical risks elsewhere, according to the April Global Macro Views report from Standish Mellon Asset Management Company LLC, the Boston-based fixed income manager for BNY Mellon.  "In the U.S., we are beginning to see tentative signs of a pickup in economic data following a harsh winter," said Thomas D. Higgins, chief economist and chief global strategist for Standish.  "In the euro zone, we have become slightly more optimistic given declining sovereign spreads in peripheral Europe and the possible freeing up of bank capital later this year after the European Central Bank's asset quality review."

http://tinyurl.com/ky7h82b

-Igor P Purlantov

Emerging Markets: Separating The Sheep And The Goats

Investors who thought emerging markets were the bee’s knees have suffered agonizing reappraisals. After several years of Federal Reserve-fueled rallies, less developed markets are now in the doldrums. Emerging economies depend on exports for growth. That means Europe and North America. Unfortunately, as long as we are still deleveraging, the export-growth model is no longer viable.  For investors it’s important to separate well-managed emerging economies, the Sheep, from the poorly run economies, the Goats. My list of Sheep–South Korea, Malaysia, Taiwan and the Philippines–have current account surpluses, which measure the excess of domestic saving over domestic investment. So they are exporting that difference, which gives them the wherewithal to fund any outflows of hot money, as have occurred in the past year.

http://tinyurl.com/pjaop5g

-Igor P Purlantov

European QE Could Bost Emerging Markets

Although the US is winding down its own programme of QE, Monson doubts that that is the end of the story of central bank stimulus creating money that ends up in stock markets. ‘I think QE is here to stay and as a consequence this extraordinary bull run in real assets has some way left to run.’Yet rather than being driven by the US Federal Reserve, Monson supposes that the next phase of the rally could be spurred by the European Central Bank – especially with stubbornly low inflation in the continent and long-standing hawks such as Bundesbank president Jens Weidmann softening their tone. ‘It is highly likely the Europeans will be the next to embark on quantitative easing,’ Monson claimed.


http://tinyurl.com/k7fn8wj


-Igor P Purlantov

Investors Dip a Toe Back in Emerging Markets

 

Despite ongoing concerns about the Russia-Ukraine standoff and a Chinese slowdown, investors are dabbling in emerging markets once again.  Nearly $2.5 billion flowed into mutual funds and exchange-traded funds that invest in emerging market stocks during the week that ended April 2, according to data from EPFR Global.  It was the first time money poured into those funds since October.  The inflow suggests that investors have regained some appetite for emerging market stocks, which were trading at a sharp discount following a big sell-off in January. The iShares MSCI Emerging Market ETF, which tracks the widely-followed benchmark for emerging market stocks, is now in positive territory for the year.

http://tinyurl.com/o9bxbmf

Resurgent Emerging Markets See Biggest Inflows

A shift by investors' back into emerging market assets gathered pace over the last week, with China and Russia seeing some of the biggest demand as EM inflows reached their highest rate in over a year.  Data from Boston-based fund tracker EPFR, which monitors funds with $23 trillion in assets, showed combined inflows to EM debt and equity funds climbed to $4.7 billion in the week to April 9.  Banks and investors have started buying back into the emerging market story in recent weeks, noting that sector valuations now are cheap enough to compensate for economic weakness and political risks.

http://tinyurl.com/ohapko4


-Igor P. Purlantov

Emerging Markets Provides Opportunity For Investors

For the better part of a year, investors have been reading about a “crisis” in emerging markets. By now you’re likely familiar with the myriad of headlines that include buzzwords such as “higher inflation,” “slower growth,” “political turmoil,” “rising interest rates” and “currency depreciation.”  We saw a spike in these negative headlines near the lows in early February of this year. Although there is always some element of truth in these fear-inducing headlines, the question for investors is, "What should I do about them?"

http://tinyurl.com/kvwjs3n


-Igor P Purlantov

Emerging Market Currencies Continue to Rally

The rally in emerging-market currencies continued Wednesday, propelling the South Korean won to its strongest level in more than five years against the dollar.  The won surged over 1% Wednesday to hit 1,038.3 per dollar, its strongest level since Aug. 2008.  "A huge current-account surplus, strong growth, and now falling unemployment are the recipe for this move," said Kit Juckes, a macro strategist at Société Générale in London.  Against a backdrop of falling U.S. Treasury yields, as expectations of early rate rises from the Federal Reserve recede, emerging-market currencies have performed strongly of late.

http://tinyurl.com/m6ce29r

-Igor P Purlantov

Emerging Markets Still In CEOs’ Sights

Shifting U.S. monetary policy, local politics, and less vibrant growth rattled investors’ confidence in emerging markets at the start of the year. Yet developing-country currencies and bond markets have rallied strongly in recent weeks.  The latest big moves by Europe-based multinational companies underscore why investors’ confidence in long-term emerging-market growth looks warranted.  Take the $50-billion merger between France's Lafarge SA and Switzerland’s Holcim. Much of the immediate focus is whether the two cement, concrete and aggregates suppliers can convince anti-trust watchdogs in North America and Europe, regions where their operations overlap, that they can sell assets to mitigate competition concerns.  

http://tinyurl.com/kela7jy


-Igor P. Purlantov

Learn to Communicate With Animals

The Animal Protective Foundation of Malta is sponsoring an animal communication class taught by David Louis in May. Now is the time to register to save your place.  Have you ever wondered what your animals are thinking or feeling, or felt that they were trying to communicate with you but you weren't able to understand? David Louis began practicing the art of animal communication in 2001, and since then he has communicated with thousands of animals, and taught hundreds of people how to do the same.

http://tinyurl.com/pwms7xa

-Igor Purlantov

Emerging Market Currencies Rally Against Dollar

Emerging-market currencies rallied against the dollar after a report showing a moderate increase in U.S. jobs assuaged worries about rising interest rates.  Investors and analysts said the data, which showed the U.S. economy adding slightly fewer jobs than economists expected in March, reduced the chances that the Federal Reserve would move up its timetable for cutting bond purchases and raising rates.  That eases the pressure on currencies, stocks and bonds in developing countries, which have struggled for much of the past year, as the Fed moved to unwind policies aimed at supporting the U.S. economy by keeping borrowing costs low. 

http://tinyurl.com/mrtkxl5

-Igor P Purlantov

Cash Trickles Back to Emerging Markets

Investors are starting to move back in to emerging stocks and bonds after a long hiatus, data from fund tracker EPFR shows, but the economic slowdown gripping the developing world is likely to constrain market rallies. Emerging stock and bond funds saw their first weekly inflows after more than $50 billion fled in the first three months of 2014, with equities snapping a 22-week losing streak, Boston-based EPFR Global said. The company, which tracks funds with $23 trillion in assets, released details of first quarter flows late on Thursday, showing that all emerging equity fund categories had shed $41 billion, following $26.7 billion losses in 2013.

http://tinyurl.com/nhjlzce

-Igor P Purlantov

Emerging Markets Regaining Confidence of ETF Investors

Emerging markets drew the largest investment flows among U.S. exchange-traded funds last week on bets developing-nation stocks will rebound after they fell to the cheapest relative to developed-nation peers since 2006.  Investors added a net $1.6 billion into ETFs focused on emerging-market equities and bonds in the five days through March 28, helping trim the outflow this year to $12 billion. Flows into the iShares MSCI Emerging Markets ETF, the second-largest of its kind, totaled $1.4 billion, the most among the almost 2,000 U.S.-based funds tracked by Bloomberg.

http://tinyurl.com/ozqhw52

-Igor P Purlantov

Jumping for Emerging Markets Junk Bonds

The first quarter was kind to exchange traded funds holding U.S. high-yield corporate debt as default rates remain benign.  The iShares iBoxx $ High Yield Corporate Bond ETF and the SPDR Barclays High Yield Bond ETF , the two largest U.S. high-yield bond ETFs, have remained sturdy despite rising anticipation the Federal Reserve will raise interest rates sooner than expected, speculation that has prompted elevated short interest in the two funds.  High-yield corporate debt from emerging markets issuers is catching investors’ attention as well, even with the spotlight on corporate defaults in China. Even with a 12.5% weight to China, by far its largest country allocation, the Market Vectors Emerging Markets High Yield Bond ETF gained nearly 4% in the first quarter, outpacing comparable U.S.-focused ETFs along the way.

http://tinyurl.com/ojmp5m7

-Igor P Purlantov

Investors Cast Fresh Eye on Battered Emerging Stocks

Investors are starting to look afresh at emerging equities after years in which the sector has been a consensus "sell".  Barclays, Citi, HSBC, Morgan Stanley and Societe Generale are among banks now advising clients to buy back in - albeit selectively - after a prolonged sell-off that has slashed valuations.  "The timing of that decision will determine people's performance (for the year)," said Fredrik Nerbrand, global head of asset allocation at HSBC, who has a 40 percent portfolio exposure to EM-related assets through hard and local currency debt, commodities and equities.  "When I talk to investors, most people agree with us on a valuation basis, but are concerned about the headline risks that still persist in some emerging markets."

http://tinyurl.com/nmq8me9

Igor Purlantov