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Daily Mail
17 hours ago
- Business
- Daily Mail
Should you switch out of the Wall Street danger zone and into... The land of opportunity?
In just a few months, the emerging markets of Asia, Europe and Latin America have undergone a radical change of image – from danger zone to land of opportunity. At a moment when portfolio diversification has become more vital than ever, this shift in perception is another trend that could be costly to ignore if you are a British investor. Wall Street investors, fearful of the damage that Donald Trump's tariffs could inflict on the American economy, are looking for territories where the President's policies may have less impact. Emerging markets appear to provide a solution, offering bargain shares and other advantages. Patricia Ribeiro, of American Century Investments, says: 'Long-term structural growth in emerging market nations should continue to be fuelled by favourable demographic trends, such as younger populations and rapid urbanisation – and by reforms to policy and regulations.' And Kamil Dimmich, of the emerging market specialist North of South Capital, warns 'the direction is set for more protectionism'. His caution comes ahead of Wednesday's deadline for tariff negotiations, after which Trump may reimpose double-digit levies on some countries' imports to America. But whatever unfolds on the day, emerging market fans such as Bank of America and JP Morgan Chase seem set to be joined by others, persuaded that there are gains to be made in advancing nations such as Argentina, Brazil, China, Hungary, India, Mexico, South Korea, Taiwan, Turkey and UAE. Owing to this optimism, the US S&P 500 index has been outpaced by the MSCI Emerging Markets Index this year (this covers 24 markets). As Chetan Sehgal, co-manager of the £1.9billion Templeton Emerging Market trust, points out, this performance would have been even stronger if Asian markets had not been held back by tariff apprehension. Emerging market enthusiasm is also being amplified by speculation about the future of Jerome Powell, chairman of the US Federal Reserve, whose term expires in May 2026 but who has come under increasing pressure from President Trump. This could expedite interest rate cuts, reducing the value of the dollar – and driving down the cost of borrowing in emerging markets. Rob Burdett, of Nedgroup Investments, says: 'What could trigger the unlocking of emerging markets' potential for investors? One catalyst could well be the weakening of the dollar which, historically, has coincided with good times for emerging market shares.' Some investors may still have reason to be sceptical about emerging markets. At the turn of the century, the source of growth was supposed to be the Brics (Brazil, Russia, India, China and South Africa) economies. But only India has delivered. Russia is out in the cold and the rest have faced a struggle, although the outlook for Brazil and China is more cheerful. The Shanghai Composite index is up by 5 per cent this year, powered by China's trade deal with the US as well as AI innovation. But if you are keen to broaden your investment horizons, here's what you need to know. TRIP TO THE UNKNOWN? Be prepared for a voyage of exploration, involving a considerable degree of hazard – and taking in unexpected stops such as Greece. This country used to be associated with economic stagnation, but is establishing itself as a dynamic force in Europe. Most Latin American nations seem set to be subject only to 10 per cent tariffs. Nevertheless, Brazil still looks to be an unlikely investment prospect with its double-digit interest rates, high inflation and turbulent Left-wing leader Lula Da Silva. Yet fund managers say there is the chance of the election of a more centrist government next year and Brazilian banks like Banco Bradesco, Itau Unibanco and XP are regarded as well-run institutions on which investors could take a gamble. The Mexican bank Grupo Financiero Banorte is also considered worth backing. Mexico's president Claudia Sheinbaum has kept a cool head in her dealings with Trump, aware of the vital importance of its US neighbour has to her country. Getting to know these markets may be fascinating, but the research into individual shares is time-consuming and difficult. Most investors will be better off in a fund or investment trust covering a spread of markets. The low-charge option is Fidelity Emerging Markets, which tracks the MSCI index. Best buy funds and trusts include Artemis SmartGARP Global Emerging Markets Equity, FSSA Global Emerging Markets, JP Morgan Emerging Markets, TT Emerging Markets Equity and Templeton Emerging Markets Investment Trust (Temit). The holdings of these funds and trusts can be found in their factsheets available online. It is worth checking these details to establish the level of risk – and whether you are comfortable backing certain regimes. ASIAN TECHNOLOGY Most funds and trusts prioritise Asia, concentrating on China, India, South Korea and Taiwan. Chinese tech groups such as Alibaba, Baidu and Tencent are popular holdings. But the favourite is the Taiwan Semiconductor Manufacturing Company (TSMC). This group may be threatened by China's predatory stance towards Taiwan, but TSMC is moving some production to the US and remains integral to the global artificial intelligence (AI) industrial revolution. Seghal comments: 'We hold TSMC. The US titan Nvidia may design the microchips for the generative AI system ChatGPT, but TSMC actually manufactures them.' Nvidia is one of the Magnificent Seven of US tech. Like the others in this sector, it relies on another emerging market business. Sehgal adds: 'At Temit, we also own the South Korean group Hynix. It supplies DRAM (dynamic random access memory), which stores code and data on computers.' South Korea has experienced political turbulence. Last year, for example, the former president attempted to declare martial law. But the situation has stabilised and although the country may have to cope with a 25 per cent levy, it could benefit from firms shifting manufacturing from China. EUROPE AND THE MIDDLE EAST If you wish to steer clear of China, given its trade war with the US, or suspect other Asian nations may not cope well with tariffs, there are adventures elsewhere. The Barings Emerging EMEA Opportunities trust focuses on EMEA – Europe, the Middle East and Africa. Alay Patel, its manager, says: 'The economic fundamentals of Eastern Europe are improving.' Patel says that Poland is also benefiting from factors such as defence expenditure – spending 5pc of GDP on this area – and the return of skilled workers. Meanwhile, the Gulf nations – UAE, Saudi Arabia and Qatar – are trying to lessen their reliance on oil by investing in tourism and infrastructure projects. Dimmich is particularly positive about the UAE. The prosperity of Dubai, its largest city, is being boosted by its mix of 'plentiful sunshine and low taxes'. But you should only approach emerging markets if you can afford to take a long-term view and be realistic about the potential rewards. Sehgal says that emerging markets will provide a return of 7 per cent to 8 per cent a year – far better than the yields on government bonds. This may dismay anyone who has grown accustomed to the spectacular gains provided by Magnificent Seven tech shares in recent years. But the Wall Street types who are embracing emerging markets seem undeterred and even rather excited – which is a strong alert to anyone postponing diversification this summer.
Yahoo
18-06-2025
- Business
- Yahoo
Is American Century Emerging Market Investor (TWMIX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Non US - Equity fund? You might want to begin with American Century Emerging Market Investor (TWMIX). TWMIX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance. Zacks categorizes TWMIX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets. TWMIX is a part of the American Century family of funds, a company based out of Kansas City, MO. American Century Emerging Market Investor debuted in September of 1997. Since then, TWMIX has accumulated assets of about $303.38 million, according to the most recently available information. The fund's current manager, Patricia Ribeiro, has been in charge of the fund since May of 2006. Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 4.28%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 3.84%, which places it in the bottom third during this time-frame. It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower. When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. TWMIX's standard deviation over the past three years is 17.38% compared to the category average of 14.1%. Looking at the past 5 years, the fund's standard deviation is 17.19% compared to the category average of 13.81%. This makes the fund more volatile than its peers over the past half-decade. Investors should note that the fund has a 5-year beta of 0.67, which means it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -5.86, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns. Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, TWMIX is a no load fund. It has an expense ratio of 1.27% compared to the category average of 0.96%. From a cost perspective, TWMIX is actually more expensive than its peers. This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $50. Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included. Overall, even with its comparatively weak performance, average downside risk, and higher fees, American Century Emerging Market Investor ( TWMIX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now. For additional information on the Non US - Equity area of the mutual fund world, make sure to check out There, you can see more about the ranking process, and dive even deeper into TWMIX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (TWMIX): Fund Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
