Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Bio
X •  LinkedIn
 

  Emerging Market Equities Fit The GARP (Growth At A Reasonable Price) Profile
Posted Under: International-Global
Supporting Image for Blog Post

 

View from the Observation Deck

  1. While U.S. stocks have set multiple all-time highs in 2013, emerging market equities stood 30.6% below their all-time high (10/29/07) at the close of August, as measured by the MSCI Emerging Markets Index.
  2. After having posted a cumulative total return of 392.12% (USD) from 12/01-10/07 (all-time high on 10/29/07), the MSCI Emerging Markets Index declined 18.25%, on a cumulative basis, from 10/07-8/13.
  3. The combination of commodity-fueled inflationary pressures in 2010 and 2011, tempering of growth in China, the world's biggest consumer of raw materials, and Europe's recession induced profit taking, in our opinion.
  4. Those events as well as other geopolitical risks led to a rally in the U.S. dollar, which gained 7.2% against a basket of major currencies from 10/07-8/13, as measured by the U.S. Dollar Index (DXY).
  5. The International Monetary Fund (IMF) estimates that "Emerging Market and Developing Economies" will grow by 5.0% in 2013 and 5.4% in 2014, compared to 1.2% and 2.1%, respectively, for "Advanced Economies."
  6. Bloomberg estimates that the earnings growth rate for the MSCI Emerging Markets Index will be 10.43% in 2014, up from 7.58% in 2013 and -6.63% in 2012.
  7. The 12-month forward-looking price-to-earnings ratio for the index is currently 9.92, well below its 13.44 average over the past 10 years, according to Bloomberg.
  8. As the chart clearly shows, we are one month out from what has traditionally been the start of an opportunistic seven-month stretch for emerging market equities.
  9. Here is the performance breakdown for October-April since 2001 (up months vs. down months): Oct (9 vs. 3); Nov (8 vs. 4); Dec (10 vs. 2); Jan (7 vs. 6); Feb (6 vs. 7); Mar (7 vs. 6); and Apr (10 vs. 3).
  10. Here is the performance breakdown for May-September since 2001 (up months vs. down months): May (6 vs. 7); Jun (5 vs. 8); Jul (8 vs. 5); Aug (5 vs. 8); and Sep (8 vs. 4).

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

To Download a PDF of this post, please click here.

Posted on Tuesday, September 3, 2013 @ 3:47 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
For Those Who May Not Subscribe To A Buy And Hold Investment Strategy
Retail Investors Still Somewhat Leery Of Stocks
Corporate America’s Flush With Cash
Cutting-Edge (Biotechnology) vs. Cutting Costs (Managed Care)
This is Only a Correction
The Clock Is Ticking And Returns Are Diminishing
Pairs of A Kind
Time To Put European Equities On Your Radar Screen
A Good Time To Make A Keen Observation
What A Difference A Year Can Make
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011

Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.