|By PR Newswire||
|February 11, 2014 09:30 AM EST||
CHICAGO, Feb. 11, 2014 /PRNewswire/ -- Securities in this article include: Market Vectors Gulf States Index ETF Fundamentals (AMEX:MES-Free Report), WisdomTree Middle East Dividend Fund (AMEX:GULF-Free Report) and Van Eck Market Vectors Vietnam ETF (AMEX:VNM-Free Report).
How Frontier Market ETFs Surged as EMs Plunged written by Neena Mishra of Zacks Investment Research:
Past few months have been quite ugly for emerging market ETFs. The start of QE tapering coupled with slowing growth in China has made foreign investors nervous about these investments.
Even though emerging markets may stabilize after the current round of panic subsides, they may not regain their past glory any time soon. As major emerging economies are beginning to mature and slow-down, they will no longer able to repeat their stellar performance seen not that long ago.(Read: Best ETF Startegies for 2014)
Investors looking for the "next big thing" in the investing world are now turning to "frontier" or "pre-emerging" markets. These countries offer compelling investment opportunities with solid growth potential and low valuations.
The MSCI frontier markets index surged about 26% last year while the emerging markets index plunged more than 3%. The outperformance continues this year as well.(Read: 3 Top Ranked ETFs that will crush the market in 2014)
What are Frontier Markets?
Although there is no strict definition for frontier markets, these are typically countries that are in the earlier stages of economic development. Their capital markets are underdeveloped and not fully/easily accessible to foreign investors.
The term "Frontier Markets" was first used by the International Finance Corporation to describe a set of small, illiquid and underdeveloped markets. Now MSCI, S&P and Russell have their own definitions of "Frontier Markets". (Read: Emerging Market ETFs: Any Bright Spots?)
MSCI Frontier Markets Index currently includes 34 countries. Most of these countries are in Middle East, sub-Saharan Africa, Southeast Asia, Latin America or Eastern Europe regions.
Why Frontier Markets?
Frontier markets are expected to grow faster than emerging and developed economies. Further, they have relatively lower valuations as well as higher income yield.
As emerging markets have become increasingly integrated with the global markets, their correlations with the developed markets have increased and the benefits of diversification have declined.
On the other hand, frontier markets still have relatively lower correlations with the developed markets. Further, most of them were not did not see major foreign investment inflows in the past few years and thus are less vulnerable to QE taper. Thus adding them as small satellite holdings in an investment portfolio can improve risk-adjusted returns over long term.
Currency Factor in Performance
One of the reasons for outperformance of frontier markets is the currency factor. Some of the frontier markets—which saw strong performance in 2013 as well as this year—peg their currencies to the US dollar or to a basket dominated by the US dollar.
As such these currencies have remained steady while currencies of most emerging markets have suffered a lot of pain. Currency losses have been a big factor is emerging markets' poor performance.
What are the Risks?
Before considering frontier market investments, investors need to be aware of liquidity and political risks of investing in these countries as they are much riskier even compared with most emerging markets. But risk-tolerant investors are likely to reap significant rewards in the long-term.
Below we have highlighted some of the options available to investors in this space.
Companies in the Gulf region have been reporting strong earnings in the past few years and property markets have shown improvement of late. Last year, MSCI upgraded UAE and Qatar to emerging market status from frontier market. The upgrade is expected to result in massive increase in capital flows to the region. (Read: Can Gulf ETFs keep glowing?)
Due to expansionary fiscal policies and low interest rates, economic activity has remained steady in recent years. Per IMF, Qatar will grow at 5% this year, while Saudi Arabia and the UAE will grow about 4%.
UAE and Qatar peg their currencies to the US dollar and while Kuwait pegs its currency to a basket of currencies, the basket is believed to be heavily weighted towards the greenback. As a result these currencies have remained rather stable.
Vietnam continues to be the main beneficiary of the migration of low-end manufacturing out of China as the producers try to take advantage of wages that are about half of that in China. The shift in China's policy to focus more on domestic consumption will also benefit Vietnam as an outsourcing center.
A pickup in developed economies is good for the country as they account for about half of country's exports, mainly apparel and electronics. Van Eck Market Vectors Vietnam ETF (AMEX:VNM-Free Report) is the only ETF option available to investors to access Vietnam's equity markets.
For the full article, please visit Zacks.com at:
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=113
Follow Eric on Twitter: http://twitter.com/ericdutram
Join Zacks on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
"We are the public cloud providers. We are currently providing 50% of the resources they need for doing e-commerce business in China and we are hosting about 60% of mobile gaming in China," explained Yi Zheng, CPO and VP of Engineering at CDS Global Cloud, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 7, 2016 05:45 PM EST Reads: 1,081
"We are a custom software development, engineering firm. We specialize in cloud applications from helping customers that have on-premise applications migrating to the cloud, to helping customers design brand new apps in the cloud. And we specialize in mobile apps," explained Peter Di Stefano, Vice President of Marketing at Impiger Technologies, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 7, 2016 05:15 PM EST Reads: 288
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
Dec. 7, 2016 05:15 PM EST Reads: 227
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
Dec. 7, 2016 05:15 PM EST Reads: 1,733
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, will discuss how AI can simplify cloud operations. He will cover the following topics: why clou...
Dec. 7, 2016 05:15 PM EST Reads: 923
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Dec. 7, 2016 05:00 PM EST Reads: 1,911
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
Dec. 7, 2016 04:30 PM EST Reads: 1,671
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Dave McCarthy, Director of Products at Bsquare Corporation; Alan Williamson, Principal...
Dec. 7, 2016 04:15 PM EST Reads: 321
"Qosmos has launched L7Viewer, a network traffic analysis tool, so it analyzes all the traffic between the virtual machine and the data center and the virtual machine and the external world," stated Sebastien Synold, Product Line Manager at Qosmos, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 7, 2016 04:15 PM EST Reads: 779
President Obama recently announced the launch of a new national awareness campaign to "encourage more Americans to move beyond passwords – adding an extra layer of security like a fingerprint or codes sent to your cellphone." The shift from single passwords to multi-factor authentication couldn’t be timelier or more strategic. This session will focus on why passwords alone are no longer effective, and why the time to act is now. In his session at 19th Cloud Expo, Chris Webber, security strateg...
Dec. 7, 2016 04:15 PM EST Reads: 314
Effectively SMBs and government programs must address compounded regulatory compliance requirements. The most recent are Controlled Unclassified Information and the EU's GDPR have Board Level implications. Managing sensitive data protection will likely result in acquisition criteria, demonstration requests and new requirements. Developers, as part of the pre-planning process and the associated supply chain, could benefit from updating their code libraries and design by incorporating changes. In...
Dec. 7, 2016 04:00 PM EST Reads: 1,271
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, provideed economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session also included a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.
Dec. 7, 2016 03:48 PM EST Reads: 234
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Dec. 7, 2016 03:45 PM EST Reads: 2,245
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Dec. 7, 2016 03:30 PM EST Reads: 1,768
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 7, 2016 02:30 PM EST Reads: 4,310