NEW YORK (Reuters) - After a scary sell-off in emerging markets in the past week, investors who specialize in the sector are looking for places to hide while also looking for opportunities to benefit.
And that means finding countries that have stronger economic underpinnings and political stability, while abandoning or betting against those whose current account balances and government budgets are deeply in the red and where there is political turmoil.
The declines have been triggered by signs of weakness in the Chinese economy, including fears it may eventually face a debt crisis, and concerns about how much hot money may exit some markets as the U.S. Federal Reserve pulls back from its bond-buying program. The stimulus that program has given the world economy in the past few years is widely credited with big gains in stocks and other asset prices.
The benchmark MSCI Emerging Market Index dropped nearly 4 percent over the last five trading days, and after Wall Street's dramatic selloff on Friday it is expected to fall further on Monday. Investors have pulled money out of emerging markets stocks funds in six of the last seven weeks, including a $422 million retreat in the week ended January 22, according to Lipper, a Thomson Reuters company. The losses are exacerbated by plunges in currencies.
Among the strategies being pursued to limit losses or take advantage of the weakness are buying ETFs that have short exposure to Brazil and other Latin American countries, buying funds that invest in mid-cap companies seen as less tied to global turmoil, and investing more in exporters in countries like South Korea and Mexico. These are countries seen having better prospects among emerging markets and the exporters earn revenue in dollars, reducing their exposure to volatility in local currencies.
"This is the time to look at countries and regions that have advantages over others," said Clem Miller, investment strategist with Wilmington Trust Investment Advisors.
SHORT BETS
Scott Kubie, chief investment strategist at Omaha, Nebraska-based CLS Investments LLC, said he would look to short ETFs exposed to Brazil, pointing to the iShares MSCI Brazil Capped ETF , which fell 2.4 percent on Friday and has lost about 10.1 percent year-to-date. The ETF tracks the MSCI Brazil Index, which tracks the large and mid-cap segments of the market.
"We see that there is some slowing in China, which obviously affects a lot of the material exports that Brazil sends to China," Kubie said. "That's one reason we think Brazil is a little bit less attractive and the one we're most negative on in the broad set of emerging markets."
The EWZ ETF has fallen 10.4 percent below its 50-day moving average, more than just about any other country-specific ETF, according to Bespoke Investments, an investment advisory firm in Harrison, New York.
One of the flashpoints of the selloff is Argentina, as the country's central bank stopped defending the peso and the government eased currency controls. That's caused a 15 percent selloff in the currency in two days.
The Global X FTSE Argentina 20 ETF
Anda sedang membaca artikel tentang
Emerging market investors find some places to hide
Dengan url
http://efektifkesehatan.blogspot.com/2014/01/emerging-market-investors-find-some.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
Emerging market investors find some places to hide
namun jangan lupa untuk meletakkan link
Emerging market investors find some places to hide
sebagai sumbernya
0 komentar:
Posting Komentar