Friday April 18, 2014
The Cambria Global Value ETF (NYSE: GVAL) was recently launched in March of 2014 to bring value investing worldwide. The international ETF will screen for opportunities using criteria based on Benjamin Graham and David Dodd's work in value investing and securities analysis, selecting the most attractively valued markets across 45 developed and emerging market countries.
With an expense ratio of just 0.69%, the international ETF doesn't charge quite as much as many international funds, but the newness may warrant conservative investors to spend a bit of time on the sidelines to see how the strategy plays out.
Wednesday April 16, 2014
RenAsset Management Chief Investment Officer Plamen Monovski recently told Investment Week Senate Conference delegates that the entire value of the U.S. technology sector is more than equal to the value of emerging markets. In particular, the entire Turkish market value right now is roughly equivalent to Starbucks, while Facebook's valuation could purchase all of Malaysia's public market.
These comparisons are not only surprising on a fundamental level, but highlight just how cheaply valued many emerging markets are relative to the U.S. Certain emerging markets could present a compelling opportunity given their dividend growth, increasing competitiveness, and ongoing improvement in currency volatilities and fiscal policies in some cases.
Shares of the iShares MSCI Emerging Markets Index ETF (EEM) is trading up more than 8.4% over the past month.
Friday April 11, 2014
China's exports fell 6.6% year over year to $170.1 billion in March, while imports fell an even worse 11.3%. These figures took many economists by surprise and quenched hopes that the downturn was only temporary. Meanwhile, the country could have a tough time reaching his 7.5% GDP growth for 2014.
"We believe that China's trade growth in the first half would be distorted as the export over-invoicing activities last year have inflated the base for comparison," said Zhou Hao, Chinese economist at ANZ in Shanghai, in a Reuters story. "Our field study also shows that the exports are more resilient than what the headline data suggests."
Shares of the SPDR S&P China ETF (NYSE: GXC) fell 2.74% over the past three months compared to a 1.43% fall in the U.S. SPDR S&P 500 ETF (NYSE: SPY).
Monday March 31, 2014
Relative valuations can provide investors with some insights into which countries may be overvalued and which may be undervalued. Using the U.S. S&P 500 as a benchmark, Japan's Nikkei 225 appears to be slightly overvalued after its recent move higher.
The Nikkei 225 trades with a price-earnings ratio of 30.16x relative to its median of 40.35 compared to the S&P 500's current 18.55x relative to its 14.53x median. While the U.S. trades above its historic multiples and Japan trades below its historic multiples, Japan's averages include two extraordinary periods.
International investors may want to consider these valuations when choosing opportunities within the two countries.