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TSE:XEC
(A Top Pick July 5/17, Up 6%) Came off hard recently. Emerging markets have become dominated by Asia, ex-Japan. 2 / 3 of the index is now the large China stocks and Korean and Taiwan, like Baidu and Samsung. In the old days emerging used to be “junky resource things,” but this is no longer the case. He is using XEC for his higher net worth clients instead of AAXJ in the US so that they are not subject to US estate.
(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.
When you’re investing in EM, you’re investing in the future. This is where the growth will be. Dominated by China, technology, and AI as a product, where the Chinese are moving ahead of the US. His firm has 10% of portfolios in this area, they believe in this story so much. Huge potential middle-class populations in the EM like India and China.
His strategists have been drawn to the emerging market sector because the performance over the past two years has been a confirming signal of positive things yet to come. These markets are become much more technologically driven and the returns should continue. The Emerging Market space is four times that of the Canadian market and is no longer directly correlated to commodity pricing.