...Hedge Funds Strategies 1 2 What are Emerging Markets and why are they so important? 2 3 Why do Hedge Funds invest in Emerging Markets 6 4 DWS Invest Global EM Equities LC 8 4.1 Inside the DWS Invest Global EM Equities LC fund 8 4.2 Performance of the fund 10 5 Hedge Funds Performance in EM scientific paper review 11 6 Hedge Funds Strategies in EM and Africa 12 6.1 Investment strategies in more developed EM. 16 6.2 Hedge Fund Strategies within Africa and Sub Saharan Africa 19 7 Risk exposures in emerging markets 23 8 Conclusion 25 References 26 Tables Table 1: Hedge Fund Strategies 1 Figures Figure 1: Emerging Markets vs. Developed Markets 2 Figure 2: Emerging Markets vs. Developed Markets GDP growth in percentage 3 Figure 3: Development of the working-age population 3 Figure 4: EM vs. US: Consumption levels 4 Figure 5: EM dept. has exceeded EM 5 Figure 6: MSCI World vs. MSCI Emerging Markets 6 Figure 7: CS Hedge Fund Index vs CS EM Hedge Fund Index 7 Figure 8: Country distribution 8 Figure 9: Industry Sectors 9 Figure 10: Equity Share Distribution 9 Figure 11: Perfomanc of the fund 10 Figure 12: EM performance 13 Figure 13: Performance of EM 14 Figure 14: Hedge Fund Strategies in Africa 17 Figure 15: Hedge Fund Strategies in Asian-pacific region 17 Figure 16: Brazil Asset Class Performance 19 Figure 17: Russia and Eastern Europe Focused Hedge Funds 19 Figure 18: African Market Sources 21 Abbreviations FX...
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...Special Report Investing in Emerging Market Currencies A Whole New World of Opportunity Editor: Evaldo Albuquerque World Currency Watch 98 S.E. 6th Avenue, Suite 2 Delray Beach, FL 33483 USA USA Toll Free Tel: (888) 358-8125 Email: http://worldcurrencywatch.com/contact-us Website: www.worldcurrencywatch.com Copyright © 2011 by World Currency Watch. All international and domestic rights reserved. No part of this publication may be reproduced in any form, printed or electronic, without prior written permission from the publisher, World Currency Watch. Notice: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold and distributed with the understanding that the authors, publisher and sellers are not engaged in rendering legal, accounting or other professional advice or service. If legal or other expert assistance is required, the services of a competent professional advisor should be sought. The information and recommendations contained in this brochure have been compiled from sources considered reliable. Employees, officers, and directors of World Currency Watch do not receive fees or commissions for any recommendations of services or products in this brochure. Investment and other recommendations carry inherent risks. As no investment recommendation can be guaranteed, the Society takes no responsibility for any loss or inconvenience if one chooses to accept them. Any information or statements contained...
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...sFinancial Markets. Homework. Suslova Maria 1) Financial system helps to provide a steady flow of funds from surplus to deficit units as efficiently as possible. Surplus units( individuals,companies etc) wish to invest funds, while deficit units need to borrow them and as there exist enormous amount of heterogeneity between these agents, there appears a need in financial system. Surplus units usually want to make a short terms investment, also they need a compensation for risk and prefer to have an ability to access funds (high liquidity), however deficit units wish to borrow for long term and do not wish to pay too high percents for the loan. For these reasons financial intermediaries appeared in the world. They take short term investments from surplus agents and give long term loans to deficit agents. Due to the law of large numbers they are able to do so and to hold not much liquidity. However there is always an ability of financial crisis and bank run, because of such functions of financial system. 2) There are 5 types of product innovations : Market broading innovations – these work to increase the liquidity of markets by attracting new investors and providing new opportunities for borrowers. Risk-managment innovations – these have the effect of redistributing financial risk exposure from agents that are risk-averse to agents that are willing to undertake the risk. Arbitraging innovations – in these agents exploit arbitrage opportunities...
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...Does that mean that risk-averse American investors should avoid Hong Kong equities? Explain. ANSWER. No. Although Hong Stock stocks are much more volatile /than U.S. stocks, their systematic component of risk is relatively low because of the low correlation with the U.S. market. The net result is that the systematic risk (beta) of the average Hong Kong stock from a U.S. perspective is only 0.85, compared with a beta of 1.0 for the average U.S. stock. In other words, diversifying into Hong Kong stocks will reduce the riskiness of a portfolio currently concentrated in U.S. stocks. 2. What characteristics of foreign securities lead to diversification benefits for American investors? ANSWER. The two basic characteristics are: a) Many foreign securities are issued by companies that produce goods and services not available from U.S. companies. b) All U.S. companies are more or less subject to the same cyclical economic fluctuations. Foreign securities by contrast involve claims on economies whose cycles are not perfectly in phase with the U.S. economic cycle. Thus, just as movements in different stocks partially offset one another in an all-U.S. portfolio, so also movements in U.S. and non-U.S. stocks cancel out each other somewhat. 3. Will increasing integration of national capital markets reduce the benefits of international diversifications? ANSWER. Despite increasing integration of national capital markets, they still don't march in lock step. Some ...
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...characteristics of emerging markets? In contemporary society, emerging Markets (EM) are increasingly becoming the most important strength that could promote the development of the world economy. Broadly speaking, the term "emerging market" has been used mainly to refer to the developing world in Asia, Africa, and Latin America. (Mody，2004). Narrowly speaking, EM refers to the stock markets of developing countries. The purpose of this article is to further analyze the characteristics of emerging markets, I am going to focus on the broad economic aspect of EM, which refers to some developing countries like Brazil, Russia, India, China. (BRICs). I would like to separate this article into three different parts. In the first part, I discuss the implications of emerging markets and why people choose to invest in them. The second part is the central theme of the article. In this part, I focus on the main characteristics of EM. After examining all the characteristics, I make a conclusion about the whole paper and put forward several suggestions for ways governments and investment companies can cooperate together to make contributions to making the markets more mature. Emerging market countries mainly contain dozens of developing countries, which are widely distributed in Asia, Latin America, and Eastern Europe; especially the BRICs (Brazil, Russia, India, China) Bruner et al (2003) classify the world economy in the following way: developed markets, emerging markets, frontier markets and unclassified...
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...familiarize yourself with the content on the website and different ways to select mutual funds. SUBMISSION #1: 1. Due week 4 in SLATE Dropbox (see Dropbox for exact date and time). 2. One partner will invest $10,000 in each of 3 actively managed* mutual funds managed by Canadian mutual fund companies. See Appendix for a list of potential mutual fund companies and funds to choose from. One fund must be chosen from each of the following categories: • Canadian Equity • Emerging Markets Equity • Canadian Fixed Income *Remember, actively managed means it does NOT follow the related index but tries to outperform the index by selecting only what the portfolio managers believes will be the best performing securities. 3. One partner will invest $10,000 in each of 3 passively managed Exchange Traded Funds with one ETF coming from each of the following categories. Canadian Equity STOCK SYMBOL Globefund Code BMO S&P/TSX Capped Composite Index ETF ZCN BMOCANEQ iShares Core S&P/TSX Capped Composite Index ETF XIC IUNSTCID Vanguard Canada - FTSE Canada Index ETF VCE VANMSCCA Emerging Markets Equity BMO MSCI Emerging Markets Index ETF ZEM BMOEMEMA iShares Emerging Markets Fundamental Index ETF CWO CLYBEMET Vanguard Canada - FTSE Emerging Markets Index ETF VEE VANMSCEM Canadian Fixed Income BMO Aggregate Bond Index ETF ZAG BMOAGGBO iShares Canadian Universe Bond Index ETF XBB IUNGTYRB Vanguard Canada - Canadian Aggregate Bond Index...
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...1. In terms of my personal characteristics, risk preference, and market beliefs, I concluded my investment philosophy as the following: Medium and long-term approach is preferred in my portfolio. It takes patience to get long-term returns. Market opportunities occur every day. Yet, success doesn't come for those who seized every chance but for those who knew when to resist temptation. I would emphasis on protecting my nest egg while still in market opportunities. I strongly advocate tactical asset allocation process and diversification over several different income and growth strategies. I believe that risk management and protection of investor's endowment are major objectives. In my portfolio, stocks may occupy a large portion and the rest would be the combination of bonds and funds. My portfolio also covers various industries and fields, mainly concentrating on education, banking, retailing, public utility and some well-known mature organizations in other fields. The use of fundamental analysis that focuses on current performance of a company, the industry, and economy is the most important ingredient in my portfolio management process. I also believe that being aware of the global macroeconomic environment, along with the knowledge on current and historical financial information, could provide a useful idea in the interpretation of current trends. I've been trying to find the firms with stable growth rate or those with strong caterlyzer. All the materials I collected...
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...recalls the word, Participatory Notes, it sends shivers across the mind of any ordinary Indian or an ordinary Indian investor. Participatory notes were one of the reasons for the largest fall witnessed ever in Indian stock markets. Participatory notes had been in news for all the wrong reasons, every second or third day, some or the other controversy associated with them props up. The most important regulators in Indian economy, i.e. SEBI and RBI are also seen in picture, day in or day out, issuing notices or warning signs to the parties concerned or related to this instrument. But the analysts associated with stock markets are not much concerned or bothered about this instrument. As some of them, don’t have any relationship with this instrument. Indeed, this instrument is much talked about when we name or see the Foreign Institutional Investors (FIIs). Although FIIs have contributed to the Indian economy, in more ways than one, but still they have not been able to earn the respect for themselves as they should be. RBI and SEBI, every now and then, are bothered about their activities and moves that might affect the economy and the markets adversely. The recently out, Lahiri Committee Report, also lays emphasis on participatory notes, its role and functioning. The question that arises in a person’s mind is that what is a participatory note, how it functions, and why is it famous for its notoriety, etc. We will try to seek the answers of the above said questions and various other...
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...rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar performance of the U.S. Active as well as Pelican Fund during 1980s to...
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...rapidly-changing bond market Pictet Asset Management May 2014 For professional investors only Overview From 16 to 9. Over the past decade, the number of sovereign borrowers rated triple-A by Standard and Poor's has almost halved. There is probably no clearer testament to the damage caused by the financial crisis. But it is not the only momentous change facing fixed income investors. In another break with the past, policymakers in the developed world no longer worry about the moral hazard of intervening in the capital markets. Driving down real interest rates close to zero has been the policy of choice in the US, UK and Japan, while in the euro zone it has become de rigueur to encourage banks to buy the bonds of those governments with the weakest credit credentials. If dealing with unorthodox monetary and fiscal policies is not challenging enough for fixed income investors, traditional bond benchmarks – and the strategies tied to them – do not help matters. In fact, they often amplify risks. Because these indices are capitalisation- or, perhaps more accurately, liability-weighted, they expose investors to the governments and corporations that issue the most debt. This not only leaves participants vulnerable to the potentially unfavourable shifts in borrower creditworthiness, it also restricts their access to more attractive investment opportunities elsewhere. The bond investor’s plight is further complicated by a recent deterioration in market liquidity. The introduction...
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...rationale? What are GMO’s main arguments in favor of value investing? Value investing is a way of investing in company stocks that are considered either undervalued or out-of-favor by the market. In other word, a value investment is one where the intrinsic value of the stock is not accurately reflected in the current market valuation. The underlying reason of too much decreasing in the stock price is that the company may be losing market shares or even in trouble due to market’s panic attributed to negative rumors as well as having management problems. Since the market price has dramatically descended, the book to market ratio of that stock will conversely increase. Consequently, this fraction is an important indicator that value investors will look at in order to justify if a particular stock is value stock or not. The rationale for investing in such value stock is that after the forces that are depressing the stock have diminished, the market price of value stock can only go upward from the bottom position to realize the stock’s hidden potential value at some point in the future. Notably, the key assumption is that once the market finally acknowledges the inefficiency that the price is too low when compared to the expected future returns, it will bump up the price and the value investors will directly benefit from the capital gain on those value stocks. Basing on this ground and reinforced with stellar performance of the U.S. Active as well as Pelican Fund during 1980s to...
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...Definition[1] Strategic markets are defined accordingly to the corporate strategy, which means the main question to be asked is “will investing in this market bring added value to the company?”. Factors affecting the answer will depend not only on the firm’s strategy and objectives, but also on its industry. It is important to stress that added value does not necessarily mean profit, or at least not in a direct way. The strategic importance of the markets goes beyond selling a product or service; it can range from labor cost, to raw materials supply, passing through technology, focus on new trends and the potential market size. To carry the analysis of whether a market is strategic or not several elements should be taken into consideration, such as industry policies, market trends, market growth rate, possible opportunities, market profitability, competition, market size, key success factors and every other key performance indicator available. Attractive markets[3] Framework for choice of markets[2] Low High Gradual Entry Rapid Entry High Disregard for now Establish a reasonable foothold Low Strategic importance of the market Firm’s determination to enter the market It is important that the firm has the ability to exploit the markets, which means it has to be willing to take (reasonable) risks. Strategic markets change over time, not long ago North America and Europe were the first choice, but as we can see Africa and...
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...New York, you originally own U.S . Dollars). #2 20 POINTS Assume you have $1,000,000 U.S. dollars that you can invest for the next 180 days. Using only the data given below, answer the following questions (a and b): ______________________________________________________________________________ Spot rate: Yen 200 per U.S. dollar 180 - day forward rate: Yen 210 per U.S. dollar Your forecast of the spot rate in 180 days: Yen 190 per U.S. dollar U.S. interest rate (annual): 10% Japanese interest rate (annual): 10% ______________________________________________________________________________ a. In which country would you invest your $1 million if you decided to use the forward market? What total amount (in dollars) would you obtain at the end of the 180 days? Show the necessary calculations. Note: Assume that there are no transaction costs. The current spot exchange is $1 = Y200, in 180 days 200/210 =.95 which is less than what we started with, if my forecast is accurate then 210/190 = 1.1so in 180 I’ll end up with more $1.1M.. in another term with my forecast I’ll profit $100,000 in 180 b. In which country would you invest your $1 million if you are 100% certain that your forecast will come true? What total amount (in dollars) would you obtain at the end of 180 days? Show the necessary calculations. ...
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...Advantages 5 a) Single Large Market 5 b) Excellent Infrastructure 6 c) Technology 6 d) Skilled and Trained Manpower 6 e) Regional Political Stability 6 f) Business Friendly Environment 7 Disadvantages 7 a) Sovereign Debt Crisis 7 b) The Use of a Single Currency 7 c) Germany Dominance 8 d) Alternative Option 8 Advantages of Acquiring a Foreign Business 8 a) High Growth of GDP 8 b) Available Large Markets 9 c) Favorable Government Policies 9 Disadvantages of Acquiring a Foreign Business 9 i. Different Business Environment 9 ii. Ineffective Regulatory Environment 9 iii. Unbalanced Economies 10 Reasons to Invest In a Foreign Market 10 i. Economic conditions 10 ii. Expectations on Exchange Rate 10 iii. International Diversification 10 Reasons to Provide Credit in Foreign Markets 10 i. High Interest Rates 11 ii. Expectations on Interest Rates 11 iii. International Diversification 11 Conclusion 11 References 12 Introduction The acquisition of business enterprise in a foreign country is part of global diversification. For instance, A US firm can seek to acquire another firm in Europe in which the business environment surrounding the foreign firm corresponds to the environment in the local US firm. The European market in the 28 different countries is diversified and incorporated with opportunities, regulations and transparent policies. In addition, an established American firm can acquire a firm in a new market. This offers a healthier...
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...Summarize the articles with your own words. The growth of the UAE economy this year is expected to recover relatively to the previous year. The reason for this decline is the implementation of a fiscal policy made by the United Arab Emirates. According to a stamen from the fund. "The economic recovery looks set to continue. With limited potential for further increases in oil production in the near term, overall GDP growth is expected to moderate to 2.3 percent," The UAE oil robust prices, and the well flow trade had a great impact in helping the country recover from the 2009-2010 debt crisis. Which bare dissipations in its property sector and led to a $25 billion debt. However, a warning of IMF stated that uncertain global renewed worsening of the global situation could lead government-linked companies to bankrupt. Extensive development had been made in the debt reform of state-linked entities; however, many entities still continued reliance on foreign funding. Thus, UAE authorities' plans to gradually consolidate fiscal policy. (Reuters, 2012) Which stage in the business cycle do you think the economy is in? Currently the economy is in the Recovery Stage the business cycle is the point at which the economy starts working its way up to better financial footing. The year 2012 will be remembered in the UAE’s history, among others, for economic recovery from the biggest financial crisis in its history starting from 2008. To summarize Dubai went through the classic Phase...
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