Emerging Market ETF Takes the Lead
Vanguard Emerging Market (VWO) has officially become the largest ETF in the emerging market equities sector, boasting a portfolio worth $46.2 billion as of last week, according to Bloomberg. This puts it just ahead of the longstanding frontrunner, iShares MSCI Emerging Markets (EEM). Notably, both ETFs track the same index: the MSCI Emerging Markets.
The Enduring Value of Investment Strategies
● The Triumph of Value Investing: Smart Money Tactics for the Postrecession Era
By Janet Lowe
Author interview with US News & World Report
Q: In light of the recent market upheavals, many investors have turned away from value investing, preferring bonds and commodities instead. Do you think there are occasions when value investing fails over multiple years?
A: I don’t believe that’s the case. Adhering to value investing strategies would have equipped investors better. Although the turmoil was immense and left few unscathed, value investors generally fared better. Such events present excellent opportunities for them to acquire undervalued assets and benefit as the market rebounds. Personally, I found my portfolio rebounded quicker than most in the economic landscape.
Upcoming ETF Conference in Boston
I will be participating as a panelist at IMN’s 2nd Annual World Series of ETFs & Indexing in Boston on March 29. My session will focus on enhancing the asset allocation process. For more details and to view the full conference agenda, please click here.
Ongoing Pressure in the Oil Market
OPEC Pressured as African, Asian Oil Tops $100: Energy Markets
Bloomberg, Jan 20
OPEC is under increasing pressure to enhance oil production as crude prices in Africa and Asia exceed $100 per barrel for the first time in two years.
Bernstein Energy: Conference Call Transcript – Key Themes for 2011 and Bernstein’s Best Ideas
Bernstein Research, Jan 21
With the beginning of 2011, we have identified several critical themes likely to propel earnings growth within the energy sector over the next few years. We anticipate improving economic data will bolster oil demand beyond current expectations. Coupled with limited supply increases, this should lead to less spare capacity and a rising oil price reaching approximately $130 by 2015.
Understanding Market Volatility
Market volatility is often cited by proponents of market inefficiency as a key indicator. Robert Shiller first presented this argument in his influential 1981 paper: “Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends?” Although this paper has sparked considerable debate over the years, it also raises pertinent questions about the bond market. If stock price volatility suggests inefficiency in equities, does the same logic apply to bonds? Paul Krugman has recently addressed this topic in his blog post, “What’s moving interest rates?”
Jobless Claims Show Positive Trend
This morning’s weekly update on new jobless claims reveals a significant decrease, marking a reversal of last week’s increase in applications for unemployment benefits. On a seasonally adjusted basis, new claims fell by an impressive 37,000 last week, more than offsetting the revised 30,000 rise from the previous week ending January 8.
Reassessing Market Returns
The argument for mean reversion in equity returns remains robust, providing valuable insights into anticipating future market performance, as discussed earlier this week. Although definitive proof is elusive in finance, historical data strongly suggests that expected returns can vary significantly over time and in conjunction with fundamental value indicators, such as dividend yield, P/E ratio, and book value. While this insight may not aid short-term traders, it offers strategic foresight for long-term planning. Nonetheless, it raises the question: why do returns fluctuate so drastically?
Connect with Me on Twitter
I’ll be sharing updates on various topics on Twitter. Explore my Twitter page:
twitter.com/jpicerno
Feel free to follow along!
Signs of Housing Market Recovery
The housing market has displayed signs of recovery in the past, but these attempts have often faltered. Is the recent uptick in new building permits a genuine indication of improvement? While optimism may be premature, it’s a trend worth monitoring.
Global Economic Insights on Currency Rise
Leading economist warns against rapid yuan rise
MarketWatch/Jan 18
Global monetary authorities should prioritize stabilizing the dollar and euro, alongside a gradual appreciation of the yuan against the dollar, as proposed by Columbia University Professor Robert Mundell in a recent financial forum in Hong Kong. Mundell, a Nobel Laureate in Economics and recognized pioneer of supply-side economics, believes this strategy would enhance stability in global currency markets.
