EM Fund Stock Picks & Country Commentaries (July 18, 2023)
EM Fund Stock Picks & Country Commentaries (July 18, 2023)
A variety of emerging market fund stock picks (US, UK & int'l funds & fund manager interviews in the media) + how investors "buy what moves" and a framework to capture & categorize EM investing ideas.
We have a variety of emerging market fund stock picks (US, UK and international funds and fund manager interviews in the media) to highlight this week (among other stocks also getting mentions late on in this post) with some quick takes being:
Some stock pick ideas for gaining exposure to the higher end of the Chinese consumer market - including non-Chinese stocks.
A Chinese liquor stock pick that is controlled by a major global liquor and spirits player.
An Indian automobile stock pick who's subsidiary is considered to be the Harley Davidson of India.
An Indian hospital chain that is generating strong growth despite a market where health care price points are generally low.
A Middle East hospital chain who's shares have steadily risen. The chain continues to expand as health care directly benefits from the oil boom.
A Mexico and Caribbean resort operator. However, shares have recently fallen back a bit as travel to just about everywhere else starts to normalize.
A leading Latin American IT services and software stock whose shares have come off their COVID highs.
Previous posts have covered various themes some funds are using to invest in China. In this post, we mention a recent interview where the fund manager discussed how they use roughly the following framework to capture and categorize investing or stock pick ideas across different market segments in India:
It seems to be a framework developed by financial professionals or academics in India, but obviously has relevance or can be applied to any market.
This post includes a link to a lengthy podcast and presentation where the framework and accompanied investing strategy is discussed in more detail. There is also a more detailed graphic about how it works or is applied with some performance figures for each quadrant going back to the early 2000s.
Finally, I am not a fan of podcasts - especially when they are only posted on Spotify (as they can be hard to navigate or skip through). However, this post includes several excellent straight to the point ones with (mainly UK) emerging market fund managers discussing investing in Asia or China (albeit they generally don’t talk about specific stocks or holdings) that are on YouTube (where they are often posted with links to skip to the key sections).
In one interview, a (somewhat well known) emerging market fund manager bluntly observed how investors nowadays have “limited knowledge” and basically “buy what moves...” For example: If he tells portfolio managers that (hated) Hong Kong stocks are actually attractive right now, they won’t buy them because the shares may not move in any direction. But if he tells them to buy Indian stocks or Alibaba, they will because these stocks move.
It was also observed how there is always something to buy and always something to avoid plus you now need geographic diversification e.g. given geopolitical tensions and the possibility (even if small…) of a World War III breaking out.
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