|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.
SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
Oct. 26, 2016 09:45 PM EDT Reads: 3,660
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
Oct. 26, 2016 09:45 PM EDT Reads: 1,129
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, will discuss how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team a...
Oct. 26, 2016 09:30 PM EDT Reads: 657
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
Oct. 26, 2016 08:15 PM EDT Reads: 1,474
In the next five to ten years, millions, if not billions of things will become smarter. This smartness goes beyond connected things in our homes like the fridge, thermostat and fancy lighting, and into heavily regulated industries including aerospace, pharmaceutical/medical devices and energy. “Smartness” will embed itself within individual products that are part of our daily lives. We will engage with smart products - learning from them, informing them, and communicating with them. Smart produc...
Oct. 26, 2016 08:00 PM EDT Reads: 1,573
SYS-CON Events announced today that Enzu will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their online busine...
Oct. 26, 2016 08:00 PM EDT Reads: 1,428
Qosmos, the market leader for IP traffic classification and network intelligence technology, has announced that it will launch the Launch L7 Viewer at CloudExpo | @ThingsExpo Silicon Valley, being held November 1 – 3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The L7 Viewer is a traffic analysis tool that provides complete visibility of all network traffic that crosses a virtualized infrastructure, up to Layer 7. It facilitates and accelerates common IT tasks such as VM migra...
Oct. 26, 2016 07:30 PM EDT Reads: 396
WebRTC adoption has generated a wave of creative uses of communications and collaboration through websites, sales apps, customer care and business applications. As WebRTC has become more mainstream it has evolved to use cases beyond the original peer-to-peer case, which has led to a repeating requirement for interoperability with existing infrastructures. In his session at @ThingsExpo, Graham Holt, Executive Vice President of Daitan Group, will cover implementation examples that have enabled ea...
Oct. 26, 2016 07:00 PM EDT Reads: 2,353
SYS-CON Events announced today that Coalfire will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Coalfire is the trusted leader in cybersecurity risk management and compliance services. Coalfire integrates advisory and technical assessments and recommendations to the corporate directors, executives, boards, and IT organizations for global brands and organizations in the technology, cloud, health...
Oct. 26, 2016 06:30 PM EDT Reads: 1,669
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, will be adding the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor...
Oct. 26, 2016 06:30 PM EDT Reads: 1,096
November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Penta Security is a leading vendor for data security solutions, including its encryption solution, D’Amo. By using FPE technology, D’Amo allows for the implementation of encryption technology to sensitive data fields without modification to schema in the database environment. With businesses having their data become increasingly more complicated in their mission-critical applications (such as ERP, CRM, HRM), continued ...
Oct. 26, 2016 06:15 PM EDT Reads: 1,153
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, will contrast how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He will show the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He will also have live demos of building immutable pipe...
Oct. 26, 2016 05:45 PM EDT Reads: 1,661
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...
Oct. 26, 2016 05:30 PM EDT Reads: 1,521
SYS-CON Events announced today that Cloudbric, a leading website security provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Cloudbric is an elite full service website protection solution specifically designed for IT novices, entrepreneurs, and small and medium businesses. First launched in 2015, Cloudbric is based on the enterprise level Web Application Firewall by Penta Security Sys...
Oct. 26, 2016 05:15 PM EDT Reads: 1,294
WebRTC sits at the intersection between VoIP and the Web. As such, it poses some interesting challenges for those developing services on top of it, but also for those who need to test and monitor these services. In his session at WebRTC Summit, Tsahi Levent-Levi, co-founder of testRTC, reviewed the various challenges posed by WebRTC when it comes to testing and monitoring and on ways to overcome them.
Oct. 26, 2016 05:00 PM EDT Reads: 4,209