In our view, one of the most important catalysts behind the increased popularity of exchange-traded funds (ETFs) is the ability to create broad-based portfolios with only a handful of trades. Fixed income ETFs cover a wide spectrum of investment sectors and can be combined to help achieve many different objectives.
While it may take time for the negative sentiment to change within traditional emerging markets, I wanted to highlight one standout of relative strength. Interestingly, when one looks at various emerging market countries, a number of the “emerging” emerging markets—or the countries that are often included in frontier market indexes—have diverged from some of the more popular emerging countries.
One of the classic exposure questions in equity investing regards market capitalization size, i.e., whether one should choose large caps, mid caps or small caps. The capitalization size segment decision is an important one, as it sets up the potential for very different performance characteristics over time.
This seems to be the bull market everyone loves to hate. Maybe it’s because many have consistently underestimated the expected return of stocks since the financial crisis of 2008. Others may resent this bull market because they missed large portions of the move.
The concept of hedging one’s currency exposure on international equity investments has been building momentum—especially in light of Abenomics taking hold in Japan during 2013. A primary question we see being discussed is whether a currency-hedged equity strategy belongs as part of a portfolio’s core international allocation or as a more satellite-oriented tactical approach.