Market. One of the biggest, puzzling factors is inflation. Where is it? Economic data is clearly getting better in the US, and that is because of automation improving productivity, so wage pressures are nowhere to be seen. E-commerce has also improved the economy. Inflation is probably going to stay constrained. She is optimistic on the industrial space, although we are not going back to the 2006-2007 levels of growth. Europe and China are looking better than expected. There is a slight adjustment down for the US, but it is still growing. The most important thing on commodities is that supplies have really been rationalized over the last 2 years. She sees the whole supply/demand balance coming back into a better picture. The emerging-market index is trading at a much lower multiple than the world Index, and certainly the S&P 500. However, you have to look at the region. She continues to prefer Asia. It is a net importer of commodities. Commodity prices where they are, is still slightly better for those that use it as opposed to those who produce it. She is wary of the Middle East because their reliance on oil is extremely high. On Latin America, she is cautiously optimistic. Likes Brazil although there might be some volatility going into the next election.

About half their business comes from Asia, South America and the Middle East. A great company and very well-run. A good quality, global consumer product company that gives you an indirect exposure to emerging markets. Valuation is a little rich for the growth profile that you are getting. Prefers the more local players. Dividend yield of 2.6%.

This is one of her top holdings. A very well-run company. They have just under 1 billion monthly active users under CHAT. They are also the biggest gaming company. Between CHAT and gaming, that is 65% of their business. They are using their free cash flow to invest in other things, such as the Cloud. They are also the 2^nd largest mobile payment company in China. Valuations are rich, at around 32X earnings, but she is expecting a compounded annual growth rate of earnings over the next 2-3 years of 35%. (See Top Picks.)

A great trading company that started back in the 1800s. A very diversified conglomerate. Her only issue is its valuation. It is expensive. It typically trades stronger or rallies if there is a surprise to the upside on a dividend. Prefers to look at some of the underparts they are invested in. Dividend yield of 2.3%.

An emerging markets ETF? Find the one with the lowest costs and the closest tracking error. Whether it is XEM-T, the more general broad emerging markets ETF, or XMM-T, the lower volatility one.

A closed-end fund. Essentially, they are looking to own big stakes, almost like Warren Buffett style, businesses in India. She likes India a lot. It is one of the strongest stories.

(A Top Pick May 31/17. Up 3.92%.) She still likes this. It hasn’t done much in the last quarter even though their earnings season was very, very strong.

(A Top Pick May 31/17. Up 40.1%.) The Amazon (AMZN-Q) of China, except they are servicing a population of 1.4 billion. They are also servicing a population, where outside the primary cities, there is very little retail infrastructure, which is why they are doing so well. Also, they are taking the cash flow from their domestic core business and are making very smart acquisitions outside.

(A Top Pick May 31/17. Up 22.47%.) One of the smaller banks in India. India really has 2 banking systems. There is the older, large public-sector banks that are dealing with some legacy loan issues from the 90s. There is also a number of banks in the late 90s that have brand-new licenses. This is one of those. They have very few legacy loans and are focused on the consumer.

This has a very, very leveraged balance sheet. A number of their bonds are coming due in the next 18 months. Because this is a very important entity to the Brazilian government, she doesn’t think there is going to be a default. There might be a painful refinancing. This tends to trade as a very highly levered higher beta call on oil prices. Have a lot of great assets, which they can always sell. Be cautious, because as a shareholder you come way behind all the bondholders.

She likes this company. It is basically the Yahoo of China. Until very recently, the last couple of quarters, they were really struggling to figure out a new business model, because search was becoming commoditized. What they’ve been doing is using AI to develop a business model, to figure out the next phase of monetization. It looks interesting. It is fairly valued, so she would be a bit cautious.

This started out being more of a consumer goods business, but their growth business was really cosmetics and beauty. Growth was coming out of China. Because of the escalation and development of the Thermal High-Altitude Defence system (THAD) in south Korea by the US, China was slightly nervous about their implementation, and became stricter with south Korea which impacted companies like this. She has been looking at this again, but is waiting to see what happens.

The largest bank in Russia. The Russian economy has been going through some noise about some additional sanctions. That is impacting the sentiment on Russian equities. This bank is extremely inexpensive at about 6X current earnings and a little less for forward earnings. She still likes this. Dividend yield of 3.3%.

If North Korea gets really out of hand and China has to intervene, will it take this sector down? These are basically the 10 biggest businesses in China. If there is an outbreak of actual tensions, she thinks these names will hold in a lot better because they are so well run.

She really likes this and it is one of her top 10 holdings. An education company that basically provides K to 12 tutoring services. In Asia, education is very important. On top of that, you layer almost 2 decades of a one child policy in China, education is absolutely non-discretionary. A very fragmented industry and anyone could actually start a tutoring business in China overnight. This company has done a fantastic job of building such a strong moat around themselves. They pay their tutors very well. Their best tutors actually have equity positions in the company. Their reputation is so high, that the company does not spend on advertising. Their biggest challenge right now is finding enough talent in tutors to grow. Trading at the highest valuation it has ever traded at.

One of the larger banks in India. She exited her position last year because of increasing noise around the loan books. It now looks very interesting to her and is looking at it again. On a valuation basis, it trades at almost half the PE multiple of some of the other private-sector banks.

A very large bank in India, and they steered clear of all of the nonperforming loan issues. However, because of that, it has very much outperformed ICICI and some of the state banks in India. It is now trading at around 20X earnings. Management is very disciplined and very focused on ROE and risk management.

One of the Argentinian utilities. She likes Argentina which is going through a transformation. Their new president is very pro-business and has replaced his government with a lot of ex-executives from the business sector. They are making Argentina business friendly. The 2 businesses that are benefiting are financials and utilities. For the 1^st time in years, there is a clear set of rules on how they would regulate the utilities. This has had a big run, and is expensive for Argentina, so tread with caution.

The largest smart phone manufacturer in Asia in terms of volume. More importantly, they now have the other side of the business, OLED screens, D RAM etc. Very inexpensive. Dividend yield of 1.7%. (Analysts’ price target is KRW3,000,000.)

This is the largest life insurance company in China. It is a diversified, with 2/3 of their business life and nonlife, but they also have Ping An Bank and Ping An Trust, which issues wealth management products. She likes the insurance as a secular growth theme because of the big savings pool. People in China like to save. Now that they are wealthier, they are starting to think more about safety. Inexpensive, trading at around 11X earnings, and growing earnings at about 13% year-over-year. Dividend yield of 1.9%. (Analysts’ price target is HKD72.24.)

This is a company that was set in Africa, but you can think of it as a very big tech venture capital firm. An inexpensive way to own Tencent (TCEHY-5). They own 33% of that, as well as 29% of Mail.ru in Russia. Dividend yield of 0.2%. (Analysts’ price target is ZAR3,710.00.)

Emerging Markets. Overall, the emerging markets are trading at a much lower valuation than the US, but you need to know where you want to be, what sector and what countries. She is very overweight India which is undergoing a multiyear, and potentially a multi-decade transformation under a government that is very pro-reform. Also, it is a very young country. 1.2 billion people with a median age of 27, who are starting to earn their 1^st salary, buying the 1^st car, etc. She also likes Korea where they have a new president, who is much more about creating jobs, as well as reforming the big conglomerates in Korea. She also likes China tech. Sees a lot of value, but also a lot of growth in emerging markets, and thinks this is where the opportunities are. There is still a lot of infrastructure left to be built in emerging markets.

She really likes this. It started out as a PC gaming company, but they’ve done a phenomenal job of creating strong IP around games that sustain themselves. Secondly, the Holy Grail for all gaming companies, they figured out mobility. They’ve grown their mobile gaming business tremendously. It is now just half the size of their PC business. Through Re-chat, their chat platform, you can do everything from ordering movie tickets to arrange when to pick up your dry-cleaning. Even though it has performed well, there is still value.

Robotics? The leaders in robotics are in Japan. The applications are really broad. Everything from robotic arms to the manufacturing of cars.

This is really 2 companies. They bought Jaguar Land Rover a few years ago. You have Tata cars in India where ownership is less than 10% of what it is in North America, but has been losing market share to some of the smaller players. Then you have the high-end auto business. Jaguar Land Rover has been a little noisy with a few tough quarters, primarily because of foreign exchange. Also, there has been a lot more competition in the high end auto business. Her preference is Maruti Suzuki (MRZY-OTC). It has 47% market share of the passenger market in India, and is growing very quickly.

She likes Argentina. A new president came into power in December 2015, and is implementing a lot of business-friendly reforms. This one is a very well-run utility. It has had a big run, being up almost 80% year to date. A lot of the move is because it is one of 4-5 ADRs that are expected to be added to the index. She is a little cautious, because it has run ahead of its fundamentals. Wait for it to settle down.

A very unique company. It started as a trading company and now owns a number of businesses throughout the Asia Pacific. On a fundamental valuation perspective, the stock has rallied really hard and it is expensive. Dividend yield of 2.4% is safe and there is possibly room for it to be hiked in the next 12-18 months.

(A Top Pick Feb 2/17. Up 21%.) E-commerce in China makes sense, because there is such a big population. She still thinks there is a lot of upside.

(A Top Pick Feb 2/17. Up 14%.) You can think of this as a Unilever or Procter & Gamble of India. Very basic consumer goods. The stock is not cheap, but what she always finds in India is that when you want to buy the secular consumer theme, you have to pay up. She tries to find the ones with a moat.

(A Top Pick Feb 2/17. Down 10%.) In Cdn$ terms it is actually up slightly because the ruble has appreciated. She still likes this. A very inexpensive bank, and the largest in Russia. Pays a good dividend and trades at around 5X earnings.

A smaller version of Ali Baba (BABA-N), an emerging e-commerce player. They’ve been winning a little bit of market share, especially in the last quarter or 2. They’ve really surprised on the upside to earnings. Valuation wise, it is expensive. They have room to continue to expand their market share.

This has had a really tough few quarters. There have been a few stumbling blocks on the FDA front and on competition, but she would say that it is bottoming out at this time. Valuation wise, it is very, very attractive. 4.9% dividend yield.

She is light in oil, because the US shale producers have come back a lot faster in terms of production. That is more than offsetting whatever OPEC is doing on the cutting side. This company is very inexpensive, and has great assets. Management has laid out a plan to divest non-core assets, pay down some debt and right size their balance sheet. If you have a long-term time horizon, this is a good risk/reward. There is some near-term noise around Brazil, which will be a bit of a headwind.

One of 3 major consulting companies in India. They’ve all been adversely impacted by some of the noise around the H1B Visa in the US, and this might impact the bottom line. A very good company, but on valuation, it is trading a little rich relative to what her growth expectations are. If you are patient, it is a great, long term story.

One of the bigger banks in India. It is a private sector bank. They’ve had a few challenges on the balance sheet side a couple of quarters ago when they started disclosing loans in cement and power sector, which were becoming a bit of a problem. Because it raised questions in her mind, she sold her position. A very well-run bank.

Even though this has performed well, it is still the leading e-commerce leader, and more importantly they are figuring out more ways to diversify their revenues and just linked to e-commerce. Think of e-data helping companies target the segment that they want. The other really interesting thing is the Ali-Cloud. They initially started the Cloud computing business in 2009, because they needed a lot of capacity themselves. Now, it is the only Cloud provider in China that provides full inter-services. (Analysts’ price target is $140.)

They dealt with their exploding battery situation very well. Did a very big recall and a big write down, because they recognized that the risk to their reputation was too high. She likes this as it is no longer a cyclical business. A few years ago, this was basically smart phones or D-RAM memory. Today they are much more diversified. Also, corporate governance has improved. Dividend yield of 1.6%. (Analysts’ price target is 2,800,000 KRW.)

The 5^th largest private-sector bank in India. If you want to invest in banks, you have to stay with private-sector banks with no legacy home issues. They are transforming from a corporate base to a retail lending business. With this transformation there will be more stable earnings, more visible earnings and lower cost of capital. (Analysts’ price target is 1,729 INR.)

Emerging Markets. A lot of emerging market countries have their debt in local currency terms rather than US$. That is important, because if debt is in your currency, you are never in default, because you can just print more. That is why she thinks vulnerability with EM is a lot lower today. What is happening in North America markets i.e. people getting out of defensive stocks and into cyclicals, is the same for Emerging Markets. That is not only in the sector level, but also in the country level. There has been a rotation out of the more “safe” value, defensive countries such as Korea, and going into Argentina, Peru, Colombia, Chile, Russia and Brazil. Investors have to stay diversified because there are a lot of macro events which can be a surprise. Whatever happens in France and Germany, will have very minimal impact on Europe overall. However, if something happens to the euro zone, the global economic picture could be impacted. Emerging markets are still very undervalued. Currencies are interesting, but with the US Fed potentially hiking 3 times, emerging market currencies will probably stay range bound for the near term. A lot of the “worse case” fears that caused investors to leave EM just didn’t play out.

Energy. There has been a return in strength in oil and we are now in a sweet spot for both the producer and the buyer. At $28, there was more pain than gain. A few countries like India, that imports 70%-80% of their oil, were really benefiting, but by and large a lot more countries were losing; Middle East, Brazil, Russia, Canada. At $50, you are starting to repair a lot of balance sheets of these governments. You are also really repairing the tax revenue stream as well as the outlook for the currencies of these governments. At the same time, oil between $50 and $60, much lower than $140, is still good for countries like India.

This is one of the fastest growing luxury OEM companies globally. Several years ago they made an acquisition of Jaguar Land Rover, so it is now a very big global auto company. Think of it as 2 businesses. Domestically they sell medium/heavy commercial vehicles. Globally, they sell Jaguar Land Rover, which in China is a fast growing market. In the last 12-18 months, the domestic market in India has been a bit slow, and she thinks that is going to improve. The global business has continued to be very strong. Valuation is very compelling and she thinks there is a 10%-12% upside.

India investing? This is going to be the fastest growing EM country and the fastest growing major economy globally. They just released their new budget, which she really likes it. Just another confirmation of the strength of their administration. There is a good balance between fiscal constraint, where they continue to shrink the deficit, and spending in very targeted ways. Her preferred space in India would be domestic consumption companies, such as the banks and some of the infrastructure.

She likes the Chinese insurance sector. Penetration levels are very, very low. The bond yield in China is starting to pick up, and that usually helps the lifecos. This is the largest company in China. They have gone through a rough time over the last 12-18 months, so it is trading at a very big discount to its peers. It will benefit from higher interest rates. She prefers Ping An and AIA (AAGIY-PK), as larger and more diversified plays.

A very well-run bank, pure retail. Loan loss ratios are extremely low. Management is very conservative. Also, Korea had not hike rates in many, many years. Recently sold her holdings, primarily because of the change in the global trade picture. There has been a shift towards more inward trade protectionism, and Korea is an extremely open economy, 40%-45% of their GDP is export oriented. Because of that, she has reduced her Korean exposure.

Will Saudi Aramco issue an IPO in the near future? There are a lot of rumours. Saudi Arabia is starting to talk to bankers and potential underwriters. Thinks this will happen in the next 12-18 months. It makes sense, because this is the single largest asset for the government. They spent a lot of their foreign reserves in the last 18 months to defend their currency, so they need to replenish that.

She likes this bank. One of the best performers in 2016, and expects the same for 2017. Benefiting from better commodity prices and a more stable government. Banks benefit very much from a normalizing economy and interest rates that are no longer out of control.

Will Canada have to rejig how it gets foreign produce that comes through a US warehouse first? Mexico is going to be tough to call. For goods coming from other countries, such as China, she is confident that Canada can form its own bilateral trade agreements.

A bank to play foreign markets? Bank of Nova Scotia (BNS-T) always has the biggest presence in Latin America. A bank that she likes this year, which is extremely, extremely inexpensive, loan growth is starting to recover and has an extremely strong capital ratio, is the Russian bank Sberbank (SBRCY-5). (See Top Picks.)

(A Top Pick Sept 30/16. Down 12%.) In Korea, they are home care and personal care. The growth is really in their cosmetics. In Canada they have the Face Shop stores, where they sell Korean cosmetics. The core business domestically is great and stable, but the growth in China is very strong. Chinese women are just starting to spend on cosmetics and facial care, and they love Korean brands. However, in Q2 South Korea deployed a terminal high altitude defence missile, and because of that the relationships with China has really become quite strained and are discouraging tourism to South Korea. This is still a great company.

(A Top Pick Sept 30/16. Down 8.73%.) One of the large Asian insurers. The main reason it was bit with a bit of selloff since the US election, is that AIA was a really good defensive holding. Post election there was a big rotation from defensive plays to more cyclicals. This is a great, great insurer.

(A Top Pick Sept 30/16. Down 5.04%.) A South African company, but think of it as a technology private equity business. The biggest value in their NAV is the Chinese tech company Tencent (TCEHY-5). However, they own a lot of little companies in India and the middle east.

Turkey? An interesting situation. When investing in a country, typically the bottom up fundamental company situation represents 75% of her decision, and the top-down macro is 30%. This country is the one exception where she is not comfortable with the political situation. She is essentially zero weight here, even though there are 34 businesses that she really likes. This country is linked to commodities, so there will probably be a tailwind in the rally they have seen.

She used to own this, but exited because of their loan book, especially corporate loans. Over the last 2-3 quarters, they are starting to get a lot more colour on some of the issues within the loan book. On the last quarter, there were even more issues coming out. If you have done well with the stock, she would consider switching to another name.

An e-commerce pure play in India or this ETF? In India, there isn’t really a publicly listed company. There is a company called Flipkart that is essentially the Amazon of India. It is private and has a lot of notable investors globally. That segment of the commerce is growing very quickly, but it is still not profitable. There is a lot of subsidizing of their delivery costs and it is very competitive on pricing. It’s a little early days, and she would rather go to this indirectly. (See Top Picks.)