A Look at Smaller Emerging Markets

Posted on 11/12/2012

Words that are like music to the ears of relative strength managers (via Equities in Smaller Emerging Markets Soar, FT):

More broadly, the divergence of emerging markets is a sign that investors are increasingly differentiating between countries and even industries in the developing world, rather than lumping disparate countries into one homogenous group, says Ruchir Sharma, head of emerging markets at Morgan Stanley’s asset management arm.

“We’re done with the era where all emerging markets do well,” says Mr Sharma, author of a book, Breakout Nations, on the next clutch of promising developing countries. “We’re finally starting to see a wide divergence of performance of these markets.”

Also noted in the article, is that the BRICs (Brazil, Russia, India, and China) have been among the worst performers in the emerging markets.  As expected, the BRICs are where the Powershares DWA Emerging Markets Technical Leaders ETF (PIE) is most underweight:
PIE 2 Smaller Emerging Markets Soar
See www.powershares.com for more information.  A list of all holdings for the trailing 12 months is available upon request.

 

This article originally appeared on the Systematic Relative Strength blog.

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