Some bite-sized thoughts from Institutional Investor’s recent investor roundtable:
Lee Partridge, CIO of Salient Partners
- Developed markets have been overhyped and are now tapped out.
- Small cap emerging is very different — it plays on emerging consumer demand directly.
- Nestle is an example of an emerging markets company. The domicile of the country versus the consumption base that’s driving the growth of that company are two different things.
- One of the things we’ve noted is, when you look at all these great returns on a local basis and you control for the currency, the currency explains a tremendous amount of the relative country returns that have been received. And one really easy way to get emerging market exposure without having to worry about the idiosyncratic risk in the companies is to just have exposure to the currency.
- I think the currencies are oftentimes a better way to play the growth directly than trying to pick the companies.
“Because of the upcoming World Cup and Olympics, Brazilian authorities are under much more pressure to make improvements to Rio, particularly in security and infrastructure. Such investments have potential to bring the city important long-term benefits. But with one of the worst public health systems of all of Brazil’s state capitals, one of the cities with the largest number of dengue cases in the country, the state with the second-highest incidence of tuberculosis in Brazil, and the third-worst performing high school system of the country’s state capitals, investments in health and education are critical. What matters for Rio, after all, is far beyond a two-week stretch of sporting events.” — Rio Gringa
“People aren’t expecting currency appreciation from emerging Asia anymore,” said Albert Ma, a Taipei-based bond fund manager at PineBridge Investments LLC, which oversees $67 billion of assets globally. “These countries are mainly export- oriented. They’d want their currencies to be weak when the global economy is going this bad.” — Bloomberg