UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: jackcrow Big gold star, 5000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: Re: emerging market bond funds morningstar Date: 7/24/2010 3:56 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
What I like about these articles is that they explain why very few took the risk 10 - 15 years ago and at the same time state that the group out performed over that period. Meanwhile the article does not come straight out an say that the only way to get those kinds of returns again is to capitalize on the next emerging markets crisis.

The article does state that current spread of a basket of emerging market over US Treasuries (oddly ignoring maturity) is 350 basis aka 3.5%. So US 10 year = 3% + 3.5% = 6.5%; is that enough of a premium to warrant local currency and economic/political risks? YMMV

Are there any capital gains left to capture?

Anyway, if anyone focused on that eye boggling 11.4% they need to keep in mind that 11.4% WAS possible if one was willing to invest on the risk/reward of emerging market debt recovery from junk to near or at investment grade levels. If anyone wants to attempt to capture those kinds or returns again then they need to find a similar risk/reward scenario which currently doesn't exist in the current funds.

jack
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement