State Street is one of the world’s largest fund managers. Keppler Asset Management, a leader in analyzing market value, selects good value major markets. State Street then selects good value shares in these markets.
The State Street Global Advantage Funds are only available to non US investors, but all of us can gain insights by studying the portfolio breakdown of these funds. Non US investors can invest in the funds.
US investors can recreate the portfolio by buying the shares in the fund or Exchange Traded Funds in equal proportions to the fund.
The current breakdown of invested countries (December 2008) of the State Street Global Advantage Emerging Market Fund is:
Country – Percent of Portfolio
Turkey 12.8%
Thailand 11.2%
Taiwan 14.0%
Russia 9.9%
Poland 11.9%
Korea 11.9%
Hungary 11.3%
Cash 4.1%
Other 12.9%
Top 10 Investments
Share – Percent of Portfolio
OAO Gazprom 4.9%
Anglo American 4.1%
OTP Bank 3.7%
MOL Hungarian Oil & Gas Plc 3.1%
AngloGold Ashanti Ltd 3.0%
Teva Pharmaceutcial Industries Ltd. 2.8%
PKD Bank Polski SA 2.6%
Magyar Telcome Plc 2.6%
Telekomunikacja Polska S.A. 2.5%
Samsung Elecxtronics Co. 2.5%
By comparing annual performance of the State Global Advantage Emerging Market Fund (EMHV) to the Morgan Stanley Capital Index Emerging Stock Index (MSCIEM) we can see how the good value approach consistently outperforms the global average…plus volatility has been lower.
State Global Advantage Emerging Market Fund Performance in Euro
Year 2003 2004 2005 2006 2007 YTD
EMHV 31.75% 27.96% 63.59% 13.37% 25.49% -48.96%
MSCIEM 29.63% 16.515 54.41% 18.23% 25.71% -50.12%
Unlike the major market review we saw yesterday, this value investment did not tend to drop more during bear markets. Value investing is long term investing. Value investing is the most dependable type of investing but not in the short term.
Here is some homework for tomorrow’s update. Review the performance of the major market portfolio shown yesterday with the emerging market portfolio today. We’ll examine significance tomorrow.
Please send your questions and comments to me at gary@garyascott.com
Be sure to put MC in the subject line so I can give you a priority reply.
Until next message may all your value be good.
Gary
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