The ‘long-emerging markets- short US’ trade
At the Sohn Investment Conference (May 8), bond guru Jeffrey Gundlach had recommended that investors go long the iShares MSCI Emerging Markets ETF (EEM) and that investors short the SPDR S&P 500 ETF Trust ETF (SPY), which follows the S&P 500 index. “When emerging markets outperform the S&P 500, active is outperforming the S&P 500,” said Gundlach. That trade has already fetched about 3% in aggregate returns; since May 8th, the EEM is already up 2.39%, while the SPY is down 0.57% (as of May 21).
Jeffrey Gundlach’s non-us investing theme is already starting to win
At the recent annual SALT Conference that was held from May 16 to 19, Gundlach reiterated his belief in the ‘long emerging markets – short US’ trade. “My theme for you is non-US investing is already starting to win, and it is time to continue to ride that trade,” said Gundlach at the recent annual SALT conference in Las Vegas.
Which emerging markets are asset managers investing in?
Within the emerging markets, other prominent fund managers have their own favorites for 2017.
- Thomas Hugger is positive about Pakistan (PAK)
- Asha Mehta’s top Asian markets (AAXJ) for 2017 include Pakistan (PAK), Bangladesh & Vietnam (VNM)
- James Bannan is looking at consumer sector opportunities in the MEA (Middle-East & Africa) (GAF) region along with Vietnam (VNM) and Bangladesh and Saudi Arabia (KSA)
- Mattias Martinsson sees long-term value in Egypt, along with popular Asian picks such as Pakistan (PAK), Bangladesh & Vietnam (VNM).
