Emerging Market Multi Currency Investment Breakdowns

Emerging Market Multi Currency Good Value Market Breakdowns

Here is an easy way to zero in on a good value multi currency investment.

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Finance.yahoo chart

Click on charts to enlarge

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finance.yahoo chart

The charts above show how the Dow Jones Industrial Index has recovered much more strongly since 2009 than the Emerging Market Index.

Last week this site’s Spring 2014 Emerging Market Value Review looked at how Keppler Asset Management’s valuations of MSCI Emerging Markets Index show that it is now undervalued by 23 % versus the MSCI World Index.  This bodes well with regard to potential outperformance over the next three to five years for the emerging markets in general.   This bodes especially well for Keppler’s Emerging Markets Top Value Model Portfolio as it is 43% undervalued.

The question is what emerging markets are the best value for investing in now?

Keppler Asset Management’s Top Value Model Portfolio contains nine best value (buy) markets — Brazil, China, the Czech Republic, Hungary, Korea, Malaysia, Poland, Russia and Taiwan at equal value.  One way to invest in these markets is with the State Street Global Advantage Emerging Markets Fund.

This fund tracks Keppler’s market valuations and invests in good value equities in the top value emerging markets.

Here is the breakdown of this funds portfolio by country and top ten holdings.   The fund is pretty much invested equally in the nine good value markets.

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Regretfully as a UCITs fund designed in Luxembourg for Europeans it is not available for American investors.

That’s okay.  We can use that fund as a bellwether to compare US emerging market ETFs.

Country distribution for the “iShares Core MSCI Emerging Markets” ETF  (Ticker Symbol IEMG)

Brazil,       10.66%
China,       18.25%
Korea        16.00%
Malaysia     3.98%
Poland         1.71%
Russia          4.30%
Taiwan       13.02%

Country distribution forVanguard Emerging Markets ETF”  (Ticker Symbol  VWO)

China       17.2%
Brazil       16.1%
Korea       13.5%
Taiwan    10.8%
Russia        6.4%
Malaysia    3.0%
Poland        1.3%
Hungary     0.6%
Czech Rep  0.4%

Both of these ETFs are over weighted in Asia and South America and under weighted in Eastern Europe when compared to Keppler’s analysis.  That may be a good thing in the short term as Russia rattles cages in Europe.

Get details on how to invest in Emerging Markets from Thomas Fischer at ENR Asset Management Thomas@enrasset.com

See how to join Merri and me with ENR Asset Management for our annual value investing seminar which this year we conduct in Montreal.


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