Calm waters surround Wall Street this morning as equities take solace in a slower economy than previously thought. In the age of financial repression, bad news is good, even if Bernanke’s rotor blades stir things up sometimes. Sailing the seas brings plenty of opportunities where bad news is already discounted. 22 foreign funds appear in Quant’s top 100 today, close to last month’s high for the year but still below levels we saw last fall.
Setting our compass to the Far East we see emerging markets rising among the top ranked foreign funds. Two China funds, GXC and FXI, are in the top 25 at 7th and 17th place and India’s INXX holds 9th place while the SPDR S&P Emerging Asia Pacific Fund (GMF) has climbed up to 22nd place from 140th on June 17th. Other emerging markets funds appear including ECON, UGEM, EEM, VWO, and ADRE in order of rank ranging from 40th to 88th place. Malaysia and Egypt see EWM and EGPT at 35th and 85th place and China also gets PGJ and HAO in the bottom half of the top 100. Australia’s 83rd place EWA isn't emerging but is classified as Asia-Pacific and the iShares MSCI All Country Asia ex Japan Index Fund (AAXJ) in 55th place shows Quant likes Asia but not Japan.
Maybe you are like Chip Starnes and long for the West in which case the three European funds in the group may be appealing. They are led by Switzerland’s EWL in 24th place, followed by Italy’s EWI in 67th and Germany’s EWG at 80th place today. Riding the easterlies further west, we see the Market Vectors Latin America Small-Cap Index Fund (LATM) scoring as well as it ever has in 53rd place after already sustaining a year to date bear market. Looking at those calm waters this morning we thought we saw a black swan but it turned out to be a Canadian goose. They like it calm and Quant likes Canada with EWC in 4th place, CNDA in 17th and EWCS in 46th. There are also a handful of global sector funds which we will cover another day.
The forecast calls for stormy weather so set your bearing and batten down the hatches for the quarter’s end. We hope those funds provide some ideas for your portfolios aside from the models’ continued US stance. Thanks for reading; we’ll close out the week, quarter and our first year tomorrow.