Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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Don't Know How to
Invest in Emerging Markets? Let this Fund do the Work |
Published: May 19, 2008
When it comes to funds tracking the same corner of the market
(i.e. domestic large-cap growth), it's not uncommon for
different indices to hold essentially the same companies --
making expenses the biggest differentiator. However, it would be
a big mistake to assume that is the case with today's featured
fund -- which focuses on the fast-growing emerging markets. While there might
be a number of different funds with "Emerging Markets" somewhere
in the title, this is not a "one-size fits all" group.
PowerShares BLDRS Emerging Markets 50 (Nasdaq: ADRE), for example,
only holds a portfolio of 50 stocks; all large, highly liquid
foreign ADRs. By comparison, Vanguard Emerging Markets (NYSE:
VWO) has a sprawling portfolio of nearly 1,000 names, many of
them in the small/mid-cap range. And WisdomTree Emerging Markets
High Yield (NYSE: DEM) falls somewhere in between, but only
devotes a microscopic 3% of assets to China, arguably the most
explosive of all emerging markets.
All things considered, PowerShares FTSE RAFI Emerging
Markets (AMEX: PXH, $26.50) looks to
be one of the best in the field. Like other funds in its family, PXH looks
past market capitalization and selects companies based on
fundamental measures like cash flow, sales, and
dividends. The portfolio contains roughly 160 companies, split almost equally
between growth and value. At nearly 20% of assets, China
represents the heaviest weighting, followed by South Korea,
Brazil, Taiwan and Russia.
Shareholders will be betting on the continued prosperity of
companies like Gazprom,
the world's largest natural gas producer, and
POSCO (NYSE: PKX), a
well-positioned South Korean steelmaker that has already made a
bundle for Warren Buffett.
Over the past five years, the FTSE RAFI EM Index, PXH's
benchmark, has posted
sizzling annualized gains of +41.9% -- about 1,400 basis points
per year ahead of the more popular MSCI Emerging Markets Index.
And since the beginning of 2000, the fund would have turned a $10,000
investment into more than $60,000, double its benchmark and
quadruple the gain of the developed markets in the MSCI EAFE.
Of course, that backtested data should only be lightly
considered, but it's impressive nonetheless. More importantly,
the underlying portfolio components are still far from stretched
in terms of valuation -- with an attractive portfolio P/E of
just 12.4.
Many
emerging markets are now entering their sixth year of a
prolonged bull market, so investors accustomed to seeing red-hot
annual gains of +40%, +50%, or more should tone down their
expectations. That being said, these markets are also tied to
some of the fastest-growing economies on the planet and should
continue to put up above-average returns, making the occasional
downturn a good window to climb in.
And we certainly saw that over the past six months, as PXH slipped more than
-20% off its highs before
bouncing back recently.
I think this fund fits the bill for an investor
looking to capitalize on the continued growth of the world's
emerging markets, and any pullback may well be a buying
opportunity. Good investing!
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Nathan Slaughter
Editor
The ETF Authority, Half-Priced Stocks
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in-depth guidance on today's leading exchange-traded funds (ETFs), plus
a proprietary ranking system designed to uncover today's most
profitable funds, please subscribe to
Nathan Slaughter's premium ETF investing newsletter -- The
ETF Authority |
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
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