Opinions
Terry Shaunessy
iShares MSCI Emerging Markets
XEC-T
PAST TOP PICK
Jul 13, 2018
$27.160
Stock price when the opinion was issued
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Some people say that Chinese problems might spill over. He sees it as production chains moving out of China into emerging markets. These economies look good, and multiples in these markets are reasonable. A very broad index. China is 30%, India 10% and a world wide spread. It’s recently had a good run.
E.T.F.'s
PAST TOP PICK
(A Top Pick Jan 24/20, Up 12%) Owns a lot of this. Two-thirds of this are mega-cap Chinese and Korean stocks, including Alibaba, Tencent and Samsung which rank among the biggest in the world by market cap. Yet, they aren't in indexes like EAFE. Eventually he thinks these big names will be migrated into the regular global ETFs. For now, XEC is the way to play them. Growth will come from Asia.
E.T.F.'s
HOLD
Great. A core holding. Low cost, pure beta play. Bullish on EM. They've underperformed for the last 11 years, and they're set for a long period of outperformance. The issue is that it's still 40% tech, and he's moving away from tech. Look at DEM instead, as it overweights EM companies that have higher dividends and a higher quality tilt. DEM is diversified, with a yield of about 4.5%, PE ratio of around 10.
E.T.F.'s
(A Top Pick June 1 / 2017, Up 5%) EM used to be resource-oriented from South America. It’s now an Asia ex-Japan index, dominated by IT and by China, Korea, and Taiwan with names like Tencent and Alibaba. Costs only 25 basis points. EM bore the brunt of Trump’s screaming, but will bounce back when this is over.