Larry Berman CFA, CMT, CTA VANGUARD FTSE EMERGING MKTS ALL CAP IDX VEE-T COMMENT Aug 30, 2021

VEE vs. XID VEE covers EM. XID: India has a young working population who speak English. India fits well into global commerce. If they build their infrastructure, India will do well. Problem is, everyone knows India's long-term story and already have high expectations. India has been underperforming the past year, so he wants to see India cheaper and offer better performance before stepping in. Wait. Look at SCIF for India small-caps For EM, focus on Asian EMs, so go with GMF-N instead of VEE.

He's been out of emerging markets because of weakness in China. But now he sees signs of promise in China. VEE is a play on China. EM is riskier than other areas, though.

Many investors are ignoring emerging markets, and this in itself creates potential. They are very cheap vs historical levels. Much of the pain has come from a strong US dollar. When US interest rates come down this might be the catalyst needed. But we would expect heightened volatility for sure around the US election. It comes down to confidence. If US investors are confident, they will move some money to other countries. A strong US economy can 'pull' others along as well. The current 'the US is the only alternative' mentality may last longer, but we don't think it lasts forever. Thus, we think small exposure internationally still makes good sense overall. 
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