Financial Times author, Ruchir Sharma, says that money flows into the emerging markets are more discriminate this decade.
As the printing presses continue to hum, however, the question remains: where will the money go? Policy makers cannot assume it will flow to the emerging markets, the way it did in the 2000s. That was an exceptional decade, when all emerging markets boomed, attracting huge new capital flows. Now the blind optimism about growth in many emerging markets has dimmed, as many face serious structural problems.
Brazil, Russia and South Africa may grow more slowly than the global average over the next few years. However, inflows remain high in some of the more reform-oriented emerging economies such as the Philippines, Thailand and Turkey.
Interestingly, countries—Philippines, Thailand, and Turkey—that he labels as “more reform-oriented emerging economies” are all countries where we have overweights in the PowerShares DWA Emerging Markets Technical Leaders ETF (PIE).
As of 4/1/2013.
These overweights and underweights have had a very positive impact on YTD performance:
Source: Yahoo! Finance
Performance numbers listed above are pure price returns, not inclusive of dividends, all fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss. See www.powershares.com for more information.
HT: Abnormal Returns