An Update On The Washout In EM Stocks – Getting Closer by Bryce Coward, CFA, Gavekal Capital Blog
About two weeks ago we highlighted the washout in EM stocks and mentioned that they will be interesting soon, but not quite yet. Given the continued weakness in EM stocks, we thought we’d provide an update. In summary, EM stocks have continued to struggle with more and more stocks joining the downbeat ranks, but we think more pain could be in order before we see a bottom. This is because, from a breadth perspective, we are not quite at the low levels seen at the nadir in 2011.
Of course, for long-term holders of EM stocks, buying when the headline index is close to a bear market (like now) is usually a money making proposition. This may be especially true for investors seeking to underweight the stocks affected the most by the slowing of China and overweight the stocks set to benefit from Chinese rebalancing. Those investors will have to venture outside the largest EM investment vehicles to express that view. Our Gavekal Knowledge Leaders Emerging Market Index is an alternative to clunky market cap or dividend weighted EM ETFs.
Below is our 13F roundup for some high profile hedge funds for the three months to the end of March 2021 (Q1). Q1 2021 hedge fund letters, conferences and more The statements only include equity positions as 13Fs do not include cash and debt holdings. They also only include US equity holdings. Funds may hold Read More