EM Fund Stock Picks & Country Commentaries (February 14, 2023)
EM fund China & India stock picks (including lesser known ones) are in focus this week along with fund stock picks & commentaries for other markets (Brazil, Korea, Taiwan, Poland, Latin America, etc).
EM fund stock picks for China and India are in focus this week (along with a number of other countries and regions) as more Q4 fund updates have dropped while we wait for more January factsheets or updates to become available. Some of the EM funds mentioned in this week’s post tend to be from lesser known emerging market fund managers.
As mentioned before, China is not just about large caps like Tencent and Alibaba and the same can be said about India. Both countries have many lesser known stock picks to choose from - often in the tech, manufacturing, and base materials (e.g. chemicals, pharma compounds etc) sectors.
Warren Buffett’s Berkshire Hathaway has been selling shares of a Chinese auto and EV battery maker stock while some of the EM funds profiled in this post are still share buyers. Why Buffet is selling may only be revealed when Berkshire Hathaway produces their annual letter to shareholders.
One EM fund has issued a statement concerning their holdings in troubled Adani Group companies while another fund also mentioned holding a Latin American stock with a USA listing being targeted by a different short-seller. However, the latter’s shares have started to slowly recover thanks in part to share buybacks.
A South Africa based Africa EM fund has pointed out how around half of the value of listed businesses in Africa are banking shares. Therefore, with rates rising, they are confident bank earnings will grow (despite a soft global environment). There is also a potentially interesting Nigerian stock with a dual listing (in London) and it should be noted how the country will be having elections later this month.
One EM fund rotated out of one Brazilian bank into another while other funds have stayed put (the technical charts for both have shares trending in opposite directions). However, I think investors need to be extremely wary about the direction Brazil appears to be heading in under Lula.
Finally, some EM funds have strategies or frameworks in place for investing in emerging markets which this post also covers. Maybe later in the quarter (while waiting for more fund updates) would be a good time for some posts covering such investing strategies in more detail.
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Before we get started with EM fund China stock picks, let me bring attention to a couple of charts from China: What could drive its markets in 2023 (Capital Group) published January 24, 2023 that I also mentioned in yesterday’s link collection post: