Bank of America Merrill Lynch says Emerging Market Bull Run is Underway

Based on its analysis of bull markets since 1976, Bank of America Merrill Lynch says that geopolitical factors, central bank policies and a focus on company earnings are all “distractions” when it comes to “riding bull markets in emerging stocks.” This according to a recent article in Bloomberg. Analysts at the firm have asserted that emerging shares could double in two years and that an overweight is warranted, the article says, even though some investors are getting increasingly skittish regarding escalating tensions on the Korean peninsula that they believe could trigger a selloff. BofAML asserts, the article says, that “the […]

Relatively Calm Emerging Markets Attracting Investors

Emerging markets—long considered turbulent–are seeing the lowest volatility they have in three years, which is attracting funds and bolstering returns. This according to a recent article in The Wall Street Journal. The MSCI Emerging Markets Index is up 25% over the past 12 months, the article reports, compared with a 15% return for the S&P 500. It attributes the flow in part to the fact that valuations haven’t risen as much as they have in the U.S. equity market. According to Credit Suisse Group strategist Alvise Marino, “When investors believe the market is unlikely to be hit by negative surprises, […]

Gundlach Says Go Long Emerging Markets

Despite conventional wisdom that says rising U.S. rates will strengthen the dollar, Doubleline Capital chief investment officer Jeffrey Gundlach recommends going short on the S&P 500 and long on emerging market stocks, according to a recent Bloomberg article. At the Sohn Investment Conference earlier this month, Gundlach quipped, “What the heck, let’s have some fun.” In a CNBC interview, Gundlach explained he isn’t predicting that the S&P 500 will fall, but suggested that “this year’s bet is a relative value play,” the article says. He emphasized, however, that investors have to watch out for value traps. “I don’t like catching falling […]

Zweig: Emerging Markets Look Good, But Don’t Rush In

Funds are pouring into emerging market funds, with one-twelfth of total holdings having come in over the past 90 days, writes Jason Zweig of The Wall Street Journal. Presumably, he says, the heavy inflow is in “hot pursuit of high recent returns” (the asset class is up 12.4% this year). While participating in these funds is a good idea, Zweig says, investors should be careful not to rush in. “These stocks aren’t so much absolutely cheap as relatively cheap,” he argues. According to Chris Brightman, chief investment officer at Research Affiliates, emerging markets are “half the price” of U.S. stocks. […]

Emerging Market Investor Picks for 2017

Bloomberg News offers a list of popular emerging markets for 2017 and the reasons why investors should be targeting them: Russia: The ruble is a “top bet” for investors that “borrow currencies with low interest rates and buy high yielding ones.” According to UBS Group AG, the ruble’s “carry trade” could potentially return 26 percent over the next 12 months. South Africa: Some investors see President Jacob Zuma’s power waning, which could lead to a debt downgrade and boost the attractiveness of the country’s stocks and bonds. Mexico: The peso is the “most attractive among developing Latin American peers.” Brazil: […]