BTC iShares Core MSCI Emerging Markets ETF

Founded by Ray Dalio, Bridgewater Associates’ top sell in the third quarter was the iShares MSCI Emerging Markets ETF (EEM).

Bridgewater Associates, the largest hedge fund in the world, had 303 positions at the end of the first quarter.

What is it exactly that helped Ray Dalio’s Bridgewater Associates beat the market and peers in 2018?

While talking to CNBC in September, Ray Dalio said that investors should get “more defensive” in the stock market, and warned that stocks’ upside looks limited.

Over the past decade, EM (emerging market) debt has delivered stellar returns compared to other fixed income categories, except high yields.

According to its institutional ownership report, Bridgewater Associates was the third largest investor in VWO with 68.9 million shares in 4Q17.

In 3Q17, the largest holdings of Bridgewater Associates were the Vanguard FTSE Emerging Markets ETF (VWO), the iShares MSCI Emerging Markets ETF (EEM), the SPDR S&P 500 ETF (SPY), the iShares Core MSCI Emerging Markets ETF (IEMG), and the SPDR Gold Trust ETF (GLD).

There are a lot of reasons behind the sharp rally in EMs (SCHE). The prominent reason is that the GDP growth in many of these nations has improved in the last few quarters partially on the back of the rise in commodity prices like copper and oil.

In September, the Federal Reserve announced it will trim its $4.5 trillion balance sheet.

The rally in emerging markets (VWO) has mainly been driven by higher earnings growth on the back of an improved business environment, rising exports, and strengthening corporate balance sheets.

Retail sales in Malaysia rose 13.9% YoY (year-over-year) in June 2017, compared with its 13.6% gain in May 2017.

Consumer prices in Malaysia grew 3.6% in June 2017, compared with its 3.9% rise in May 2017.

Manufacturing activity in July 2017 South Korean (EWY) manufacturing activity dropped in the July 2017, with a sharp reduction in output. The Nikkei South Korea (EEM) manufacturing PMI decreased to 49.1 from 50.1 in June, according to an IHS Markit report. Manufacturing activity in South Korea returned to contraction, with reduced orders for its key export markets, […]

Manufacturing activity in Indonesia In July 2017, manufacturing activity in Indonesia (EIDO) fell at the fastest pace in 19 months, mainly due to sharp decline in its output. Indonesia’S (EEM) manufacturing PMI (purchasing managers’ index) fell to 48.6, compared with 49.5 in June 2017, according to an IHS Markit report. New orders also fell in July […]

Consumer confidence in Indonesia (EIDO) fell to 122.4 in June 2017 from an all-time high of 125.9 in May 2017.

Manufacturing activity in Indonesia (EEM) in July 2017 fell at its fastest pace in the last 19 months mainly due to the sharp decline in its output.

South Korea’s (EWY) consumer confidence continued to remain steady at 111.2 in July 2017 compared to 111.1 in the previous month.

Slower growth in exports, manufacturing, and investments impacted economic activity in South Korea (EWY) in 2Q17.

Uncertainty related to India’s new goods and services tax, which was implemented on July 1, 2017, seemed to affect India’s manufacturing activity in June 2017.

Consumer prices in Mexico (EEM) surged 6.31% year-over-year (or YoY) in June 2017, compared to their 6.16% rise YoY in May.

Consumer prices in Indonesia (EEM) rose 4.4% on a YoY (year-over-year) basis in June 2017—compared to a 4.3% rise in May 2017.

Global growth is expected to drag itself into greener pastures supported by the improving global and US factory output and sentiment indicators.

According to Morgan Stanley, US high yield bonds (IGHG) (LQDH) generated a return of 14.4% in 2016.

In the previous articles of this series, we discussed population and economic growth as the two major drivers leading to a rise in emerging markets (EMQQ).

The IMF noted that emerging markets and developing economies need to avoid being financially vulnerable and to ensure that growth won’t reverse course.

The sharp rise in global liquidity conditions has been channeled mainly into emerging market (EEM) economies.

Emerging markets (IEMG) (AAXJ) are expected to grow at a healthy pace of 4% in 2016 and see even higher growth in 2017.

An interest rate hike in the United States (IVV) is likely to pose a huge challenge to emerging markets.

Bridgewater Associates is one of the prominent hedge fund management firms.

Those who recognized the upside potential in emerging market equities in early 2016 are likely already in the “hangover stage” of celebrating sizable YTD (year-to-date) returns.

The upside reversal in emerging market equity ETFs has become one of the most remarkable investment themes in 2016. Investors don’t want to miss out.

Under the current uncertain economic circumstances, investors flocked to emerging market debts in search of higher yields.

Emerging markets are looking attractive. In July, after nearly a year, stocks hit the highest level after chances of an interest rate hike by the Fed abated to a large extent.

The rise of the actively selective investor becomes more nuanced within the context of our entire ETF universe.

Last week‘s ETF fund flows showed the beginning of a remarkable shift in investor behavior and asset allocation.

The iShares Core MSCI Emerging Markets ETF (IEMG) saw the largest inflows among country ETFs last week.

In the past three decades, emerging market (EEM) economies grew rapidly, led by exports, which shifted current account balances from a deficit to a huge surplus.

On the international front, Japan’s Prime Minister, Shinzo Abe, did not provide the fiscal stimulus details that investors had hoped for.

Though valuations in the broader emerging markets have become attractive, investors need to look at specific pockets for better opportunities.

Even on the earnings yield basis, emerging markets look attractive with a yield of 8.4% compared to 6% for the S&P 500 and 6.7% for the MSCI EAFE Index.

The appreciation of emerging market currencies against the dollar bodes well because when a currency strengthens, imports get cheaper.

Global equity markets (IEFA) have witnessed an intense bout of volatility in the past year. They’ve had corrections of more than 10% twice in 2015.

With the recent fall, some of these emerging markets have certainly become very cheap compared to most of the developed markets.

The recent correction in the global (SCZ) equity markets makes valuations very attractive.

Global equity markets (EFA) have been on a rollercoaster ride for the past few months. The sharp fall in stocks last year was initially triggered by fears of a hard landing in China (MCHI).

The bull run from 2003 to 2007 brought the S&P 500 Index to the 1,500 level.

During the week ended January 8, 2016, emerging market equities saw total outflows of $387 million, compared to inflows of $540 million during the previous week.

The demand for commodities has been dampened by a variety of factors, particularly in the last two years.

Forget the September versus December debate. The Fed may already be behind the curve, according to Rick Rieder.

In 2015, the tables have turned, and India and Indonesia are now lagging behind other emerging markets.

Emerging market equities received $1.37 billion of new flows for the week ended April 24, 2015.

India is part of the BRICS nations. Tracking their economic growth is important. They represent large and growing economies in five of the seven continents.

According to IMF data, India is the tenth largest economy in the world. It’s gross domestic product (or GDP) was $1.876 trillion in fiscal year 2013–2014.