{"id":12720,"date":"2012-07-25T01:29:44","date_gmt":"2012-07-24T23:29:44","guid":{"rendered":"http:\/\/www.myza.co.za\/07\/how-to-play-it-emerging-markets-now-a-stock\/"},"modified":"2012-07-25T01:29:44","modified_gmt":"2012-07-24T23:29:44","slug":"how-to-play-it-emerging-markets-now-a-stock","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/how-to-play-it-emerging-markets-now-a-stock\/","title":{"rendered":"HOW TO PLAY IT – Emerging markets now a stock"},"content":{"rendered":"

\t\t<\/span><\/p>\n

By David K. Randall<\/span><\/p>\n

<\/span><\/p>\n

NEW YORK, July 24<\/span> (Reuters) – The recent economic slowdown
\nin China and Brazil is prompting some investors to take a
\ndecidedly old-school approach when it comes to emerging markets:
\nstock-picking.<\/p>\n

<\/span><\/p>\n

Though buying and selling individual companies based on
\ntheir merits is as old as Wall Street itself, it’s a practice
\nthat had fallen out of favor recently.<\/p>\n

<\/span><\/p>\n

The rapid growth in emerging markets like China, Brazil and
\nIndia over the past few years led many to pass over active
\nmanagement on the theory that a rising tide would lift boats
\nthroughout the developing world. Dollars flowed instead to
\npassively managed index funds and exchange traded funds such as
\nthe $50.6 billion Vanguard MSCI Emerging Markets ETF,
\nwhich now is one of the largest funds in the world by assets
\nunder management.<\/p>\n

<\/span><\/p>\n

But popularity comes with its downsides. Some advisers and
\nmoney managers contend that passively managed emerging markets
\nfunds are too top-weighted toward exporters and other cyclical
\nindustries whose revenues may be tied to economic growth in the
\nU.S. or Europe. These managers are instead turning to active
\nmanagement, or stock-picking, to target the global emerging
\nmiddle class.<\/p>\n

<\/span><\/p>\n

“What we want to invest in is in Indians who can buy an
\nextra bottle of shampoo or extra shirts. I don’t want to invest
\nin another call center for Europe because the consumption of the
\ndeveloped world is very sluggish,” said Weyman Gong, a principal
\nat Signature, a Norfolk, Virginia based wealth management firm
\nwith about $2 billion in assets under management.<\/p>\n

<\/span><\/p>\n

Emerging market index funds tend to be too tied toward
\nindustries like energy or mining rather than smaller companies
\nthat focus on providing such basics of middle class life as cell
\nphone service, food and entertainment, Gong said.<\/p>\n

<\/span><\/p>\n

The iShares MSCI Brazil index, for instance, has
\nabout 35 percent of its portfolio invested in the energy and
\nmaterials sectors, according to Morningstar. The Market Vectors
\nRussia ETF, meanwhile, has 40 percent of its portfolio
\ninvested in energy companies. Vanguard’s large MSCI Emerging
\nMarkets fund has about 35 percent of its portfolio invested in
\nmaterials, financials or energy companies.<\/p>\n

<\/span><\/p>\n

“We try not to use ETFs in emerging markets, with Russia
\nbeing the extreme example. You’re not investing in Russia with
\nthese funds, you’re investing in global oil,” he said.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

By David K. Randall NEW YORK, July 24 (Reuters) – The recent economic slowdown in China and Brazil is prompting some investors to take a decidedly old-school approach when it comes to emerging markets: stock-picking. Though buying and selling individual companies based on their merits is as old as Wall Street itself, it’s a practice […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-12720","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/12720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=12720"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/12720\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=12720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=12720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=12720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}