EM Fund Stock Picks & Country Commentaries (June 2, 2024)
The case for India + 10 reasons to invest, El Niño + La Niña Latam impacts, Turkish stocks, EM elections to watch, South Korea reforms, EM w/o China, is China exporting deflation, etc.
As of the start of June, there are not many new fund factsheets or commentaries available, but there is plenty of research over the past month worth highlighting:
🚨📈 This Credit Suisse Research Institute (CSRI) report (although from last year…) has a table on page 9 entitled, Selection of largest and oldest family and founder companies globally, and another table deeper in the report listing the top 100 unicorns globally: The Family 1000: Family values and value creation (opens a PDF file) - The fifth edition of this report, published by the Credit Suisse Research Institute, explores the business model and investment performance of listed family- and founder-owned businesses and how they outperform non-family-owned companies.
🚨 Capital Ideas has this piece with useful graphics - including an Elections to watch (Country / Election type / Date / Free and Fair index / Institutional strength) table: The year of EM elections - Analysis suggests that while fiscal and monetary policy tend to ease moderately during election years, there has been little broader impact on underlying macroeconomic trends… That said, countries with less robust institutions may experience a more pronounced and enduring effect – and that might prove key in a year of so many emerging market elections.
This paper is a bit academic but might be useful to some fund managers: Cost mitigation of factor investing in emerging equity markets - At the beginning of factor investing research, the investment universe concentrated on developed markets and transaction costs were paid little attention. Expensive trading costs of factor investing in emerging equity markets influence optimal portfolio decisions. Based on a total costs estimate of factor-based portfolio tilts, a simple cost-mitigation approach increases net performance. Exploiting the structure of market impact, we indirectly control the costs by limiting order sizes relative to their underlying stocks’ short-term liquidity. This cost-efficient strategy yields better implementability and lower-priced turnover while a possible negative effect on gross performance is more than offset.
The following Asia focused funds or fund managers have new factsheets, commentaries, research pieces, podcasts or webinars that would interest investors in Asia:
🇨🇳 Matthews Asia has this piece: China’s Policy Inflection Point Arrives - Andy Rothman says China’s moves to address key challenges in its housing sector mark a significant shift from its stance of downplaying problems and signal that further positive macro measures may be on the way.
🇨🇳 BNP Paribas AM has this piece: Is China’s Politburo finally putting its money where its mouth is? - Market sentiment on China has improved now that the Politburo has signalled further stimulus and reiterated its focus on structural reforms. Beijing’s pledge of more support for the economy, and now the ailing property market, has lifted Chinese stocks by almost 20% from February’s low. Still, to brighten the outlook for the economy and asset markets further, monetary and fiscal policies should be relaxed further.