[ad_1]
Investors are increasingly interested in emerging markets, and they are now looking for sectors and stocks that are best positioned to benefit. “Emerging markets are too important to ignore,” said Malcolm Dorson, senior portfolio manager at U.S.-based Mirae Asset Management, which manages about $600 billion in assets. “Emerging markets have decades of history and huge opportunities. They offer very favorable valuations and have huge growth potential,” he told CNBC Pro. Dorson pointed out that the population of emerging markets exceeds 4 billion, adding that each country will have “significant domestic consumption stories (and) long-term opportunities.” One of the easiest ways to invest in emerging markets is through exchange-traded funds (ETFs). Here are four markets and ETFs that Dorson is betting on. India: “Best structural story” Dorson’s focus is on India, one of the most watched markets. “India is the best structural performer among emerging markets. I want to use this market as the foundation of my portfolio to pay for the school fees of my children and grandchildren,” Dorson said, naming the Global X India Active ETF (NDIA-US) as one of the markets to watch. Dorson’s fund, one of India’s largest foreign asset managers, owns Global X. The Global X India Active ETF has 30 holdings and about $18.6 million in net assets. Companies such as Infosys, Reliance Industries and Tata Consultancy are among its top holdings. The ETF has returned about 12%, underperforming its benchmark, the MSCI India Investable Market Index, which has gained 18.7%, according to FactSet. Brazil: A ‘cheap’ market Brazil is another “interesting” market because it’s “very cheap right now,” Dorson said. The South American country paused its rate-cutting cycle in June but could cut further if the Fed does, he added. Citing past cycles, the portfolio manager noted that “for every 1% drop in the Brazilian real against the dollar, Brazilian stocks have risen 5%.” Dorson is investing in the Brazilian market with the Global X Brazil Active ETF (BRAZ-US), which is “focused on growth at a reasonable price.” The ETF is down about 15.2% year to date. Its benchmark, the MSCI Brazil IMI Index, fell 16.1%, according to FactSet. Argentina: Economic Recovery Argentina is another South American market Dorson likes. Speaking about President Javier Milley’s economic plans, Dorson said, “His approach of cutting subsidies and costs and raising taxes will slow down … the economy, but this is exactly the medicine the country needs to grow.” Milley is seeking to revive Argentina’s economy with a new bill that offers investment incentives and tax reforms, among other measures. Dorson said the country’s economy continues to grow and fiscal surpluses are growing as monthly inflation figures fall. He is investing through the Global X MSCI Argentina ETF (ARGT-US), which he said invests in the country’s “largest and most liquid securities.” Year to date, the ETF has risen 13.6% as of July 23, while its MSCI Argentina IMI benchmark has risen 29.1%, according to FactSet. Greece: “Best Value-Oriented Opportunity” In Europe, Dorson sees opportunities in Greece because “Greece has a strong margin of safety from a valuation perspective.” “Greece is probably your best value-oriented opportunity,” he said. “Greek banks trade at 0.6 times book value, and the entire Greek market trades at about 0.9 times book value.” Last year, Standard & Poor’s and Fitch upgraded Greece’s credit rating to investment grade, while Moody’s upgraded it to below investment grade. Dolson expects Greece to be upgraded to “developed market” status within the next two years. The optimism about Greece comes as the country’s economy, which is recovering from a years-long debt crisis, is expected to grow nearly 3% this year, outperforming the eurozone average of 0.8%. So far this year, the ETF has returned about 16.12%, according to FactSet, beating its MSCI Greece IMI benchmark’s 15.7%.
[ad_2]
Source link
