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Tuesday, June 24, 2014

Keeping It Simple Seems The Best Approach

Investors especially "sophisticated" ones seem to perennially be in search of "alternative " assets particularly hedge funds. Yet over and over again these funds show poor performance.
Furthermore with their 2+ 20" standard fee structure (2% management fee and 20% of profits) the hurdle for even a successful hedge fund manager to produce superior returns for clients is quite large.

But the WSJ reports the hunt for alernative assets particularly hedge funds keeps growing among pension funds and endowments.

Consider this: investing in an ETF with a management fee of .20%  (many can be found for half that fee) a 10% gain in the underlying assets held by the etf would mean a 9.8% return to the investor.

On the other hand for the investor paying "2+20" the 10% return on the underlying portfolio of the hedge funds would mean 6% net return for the investor.

And that is even without the dismal performance described here

Corporate pension funds and university endowments in the U.S. have missed out on much of the rally for stocks since 2009, following a push to diversify into other investments that have had disappointing performances.
The institutions, ranging from large corporations such as General Motors Co.GM +0.44% to big universities such as Harvard, have been shifting to hedge funds, private equity and venture capital. But while these alternative investments outpaced stocks during 2008's market meltdown and are seen as potentially less volatile, they have badly lagged behind the S&P 500 since 2009, a period in which U.S. stock indexes have more than doubled.....
The shifts haven't worked out lately. Since the start of 2009, when the market began rallying, the S&P 500 has climbed 137%, including dividends, to record levels. By contrast, the average hedge fund is up 48%, according to research firm HFR Inc., while the average hedge fund that is focused on stocks has risen 57%. Over that same time, private-equity funds have climbed 109% on average, while venture-capital funds rose 81%, according to Cambridge Associates.
I must say I was shocked at the high percentages allocated to alternatives relative to stocks particularly among college endowments:
The average college endowment had 16% of its investment portfolio in U.S. stocks as of the end of June 2013, the most recent academic year, according to a poll of 835 schools conducted by Commonfund, an organization that helps invest money for colleges. That is down from 23% in 2008 and 32% a decade ago. The 18% allocation to foreign stocks didn't change in that period. Schools in the poll, which collectively manage nearly $450 billion, had 53% of their funds in alternative strategies, up from 33% in 2003.
The pension fund numbers are shocking as well:
Among large U.S. companies with small allocations to stocks in their pensions, shareholdings ranged from 5.2% at NCR Corp.  to 14% at Prudential Financial Inc.and TRW Automotive Holdings Corp to 15% at Ford Motor Co. to 18% at General Motors to 19% at Citigroup Inc., as of the end of fiscal 2013, according to Milliman and data provided by the companies.
At one time use of alternatives if at all was seen as a complement to a more straight forward allocation to stocks and bonds offering lower fees and more liquidity....things have changed radically.
I dont know who is managing the money managers here...but it seems to me as fiduciaries of these monies...somebody should be taking a closer look. Maybe old fashioned boring common stocks merit a bigger allocation in these portfolios.

Some Wisdom From the WSJ on How to Deal With the Surging Stock Market....

Some wisdom from the weekend WSJ

Brett Arends on ways of coping with the large gains in the US stock market my highlights in red All quotes in italics

The Surging Stock Market: Too Late to Buy?

How to Think About Investing When Prices Are This High

Main Street is starting to stampede. As the stock market surges to new highs, ordinary investors who missed a lot of the rise have been rushing to jump on board.....
It's easy to see why. Most people find it very hard to resist a crowd. (Economists call this "herd behavior.") And with the Dow Jones Industrial Average nearing 17000 (compared with less than 7000 in 2009) it can seem like everybody is making easy money except you.

Some of the strategies he mentions with those sitting with cash on the sidelines...but they apply to all investors in my view:

"Be fearful when others are greedy, and greedy when others are fearful," advises Warren Buffett, the most successful investor in history. His meaning: The market is never so dangerous as when everyone else is optimistic and share prices have already risen a long way. Indeed, historically, you could have made money by investing in stocks when the public was selling, and selling only when the public was buying.
At current levels U.S. stocks in particular are very expensive by long-term measures, such as those which compare stock prices to dividends, the value of company assets or average earnings from the past 10 years. Many on Wall Street say a correction is long overdue. The Federal Reserve is winding down the easy-money policy which has helped drive up stock prices....

. Keep your balance
It is a beginner's mistake to put too much money into the stocks or assets that have already risen the most. During a boom, that typically includes the most volatile assets, such as small-company stocks and the stocks of companies hoping for the most growth. Those are the assets most vulnerable to a pullback.
Investors can reduce the dangers by committing in advance to a balanced portfolio that includes less-volatile assets, such as government bonds, which offset high-volatility stocks....
 Look for value
During every boom there are always some who lose sight of what a stock really is. They talk about "beta," "growth stories" and "blue sky valuations," forgetting that a stock is simply a claim on a company's future cash flows.
The less you pay for those cash flows, the better the deal. The more you pay, the worse the deal. Decades of research shows that those who invest by this principle earn superior returns with lower risk. Stocks that are cheap in relation to their net assets, per-share earnings and dividends have proved the best investments over time....
Go global
U.S. stocks have risen much further lately than those of other countries, including many in Europe and Asia. At current levels U.S. investments may entail higher risk, and possibly lower long-term returns.
Focusing your investments too much on your home country's market is a common beginner's mistake. Professional money managers often go along with this in order to get along. But it has no justification in theory or practice.
You can lower your risk by investing in global stock funds rather than in the U.S., giving yourself adequate exposure to developed overseas markets such as Japan, Germany and the U.K. and so-called emerging markets such as Brazil and those in Southeast Asia.

Friday, June 20, 2014

Israeli Shekel/US $ Exchange Rate Update

The shekel/$ rate moved under 3.45 considered an important psychological and technical level(i.e. technical analysis) it also has been a level in the past where the Bank of Israel has intervened however there has been no intervention so far to slow the strengthening of the shekel.


Israeli business newspaper The Marker (Haaretz) reports:

Dollar sinks to lowest level in more than three years
The dollar dropped to its lowest level against the shekel in more than three years Thursday as the greenback weakened globally. The dollar fell 0.38% to a Bank of Israel rate of 3.4450 and was down to 3.4360 in late trading. The euro edged 0.08% higher to a Bank of Israel rate of 4.6941. The dollar was driven lower around the world after the U.S. Federal Reserve signaled that over the long run interest rates would be lower than it had previously indicated. Since March 27, the shekel has strengthened 1.7% against the dollar. “Without government involvement besides that of the Bank of Israel, it’s only a matter of time before a wave of layoffs and business closings hit the headlines,” said Yossi Fraiman, CEO of Prico Risk Management. (Shelly Appelberg)

Thursday, June 19, 2014

The Value Outperfromance Persists...Buy You Need to Have a Long Term View to Benefit From It

The Value Premium is Alive and Well

John Rekenthaler of Morningstar wrote an interesting piece on value and small cap investing and the data of the outperformance of these sectors of the market. He was also commenting on an article over at Advisor Perspectives. 
On small cap outperformance he writes:
Actually, there is some question whether small-company stocks really do all that well. The "small-company effect" was the first academically documented anomaly, as Rolf Banz’s 1981 paper predated the initial academic research on value investing, and was once widely believed. It stands to reason that smaller companies are riskier businesses than are larger firms, and thus deliver higher returns. But performance over the past 35 years has been disappointing, particularly when the theoretical gains are adjusted for the hard reality of transaction costs.

On the value outperformance he notes

Has the value premium dissipated over time?
Happily--as I did not have the data immediately at hand--Huebscher answers his own question. He cites Ken French’s research as showing that value stocks outperformed by 4.57% annually before 1992, and by 2.78% annually since. 
The surprise is not that the advantage declined, but that it continued to exist at all. After all, the market risk associated with value stocks appears only rarely. In addition, that danger is moderate rather than severe because the alternative to value investing, growth stocks, also gets whacked by a market crash. Yes, growth stocks figure to lose somewhat less under such circumstances, but smacking into the pavement after a 35-foot fall, rather than one of 40 feet, offers scant consolation.
I would agree even at 2.78% that outperformance is quite large considering the research on this is so well known. I think the explanation here can only be behavioral what Bill Bernstein calls “the bozo effect”. But those Bozos” don’t only include individual investors but fund managers as well.

The fund managers may not be Bozos in the sense that they are behaving rationally based on their personal rewards. Such managers are fearful of “tracking error” underperforming the market which leads to outflows from their funds…which reduces their compensation and even puts their job in jeopardy.  And value strategies work in the long term. Price eventually returns to value but by that time has come plenty of short term performance chasing cash has moved out of the mutual fund that has been buying value stocks. And fund managers are paid according to assets in their funds. In other words in career management the managers may not be such “Bozos” they are maximizing their wealth if not that of the investors in their fund.

In any event I don’t think the evaluation of the small cap portion of strategies is sufficient. Small cap growth stocks are consistently the worst sector of the market in terms of risk/return. This is the domain of bubble stocks.

When one looks at the outperformance of small value stocks the data shows the small value premium effect is alive and well.

Below  is a graph of growth of wealth for the last 20 years for the S+P 500 and the msci small value index, the Russell 300 small value index and the DFA (Dimensional) Small Cap Value fund as well as a table of returns. The outperformance of small value is clear.
You can click to enlarge either of these:

But the value investor must be patient and willing to tolerate periods of underperformance. During the tech boom of the late 1990s there probably wasn’t a strategy that looked worse than tilting to value stocks. Kudos to John Rekenthaler for admitting he was among those who had a negative view of value tilted indexing investors. From a recent article of his over at Morningstar advisor: Rekenthaler writes:

Last week, I exchanged emails with an investor named Alex Frakt, who mentioned that I had addressed one of his questions in an earlier version of this column, way back at the start of the New Millennium. What question, I asked. Which was the better fund company, Vanguard or DFA, he responded. 
Oh, dear. I do recall. This was what I wrote, in May 2000:
DFA’s position is illogical. Effectively, DFA believes that when allocating among investment styles, one should ignore the market’s judgments, but that when making stock-by-stock decisions, one should strictly obey them. Curious. 
"At heart, DFA is by and for engineers. The company collected a ton of data, analyzed it extensively, and came up with an indexing scheme that it views as better and more-sophisticated than "naive" indexers like Vanguard. All this analysis is predicated on the premise that the future will mimic the past and, therefore, that the initial inputs are correct. I dispute the premise and therefore I dispute the results. More to the point, so has the market. In its 18 years of existence, DFA’s small-value tilt has harmed it more than helped. You would have made a lot more money following Vanguard’s cap-weighted approach. Surely that’s gotta account for something, too." …
Although I couldn't have predicted that DFA's small-company and value-stock tilt would thrive from that day forward, thereby propelling the company’s lineup to spectacular gains, I certainly should not have implied otherwise. There was nothing wrong in contrasting DFA’s claims with its then-lackluster results. But I should not have left the analysis at that. Quite the contrary. Early 2000 was the ideal time to mention that, at long last, DFA might be ready to fly. …
In explaining what was wrong with his analysis he notes that one reason was ::
 Succumbing to the recency effect 
That one hurts. I knew very well that the most common investment mistake was assuming that the future would resemble the recent past. After all, I had been in the business for 12 years, had made my share of such assumptions, and had watched many others make the same error. For that reason, I had become quite the contrarian. I also knew that small-company and value stocks were desperately out of favor and were priced for a rebound. But even so, I stepped into the trap. The force is strong with the recency effect.  

I give Mr. Rekenthaler a lot of credit for writing about his error…it is a lesson for all investors.

Wednesday, June 18, 2014

Morningstar on Rebalancing and Emerging Markets

John Rekenthaler of Morningstar with some interesting thoughts on rebalancing of portfolios

....Implicitly, I've described mean reversion. Which is indeed what researchers find when documenting the behavior of financial markets. Although winners often remain winners over the short term, meaning for a few weeks or months, they tend to slide back when the time period extends past one year. Meanwhile, losers rebound. ....

Thus, it's sensible to rebalance assets that have similar risk levels. One example is different segments of the U.S. stock market, such as value versus growth and large versus small. Another would be between the stocks of different geographic regions, for example, the United States, Europe, and Asia. 
I would extend that advice to include developed-markets versus emerging-markets exposure. While emerging-markets stocks are certainly a riskier bunch, and thus should have superior long-term returns, it's not clear to me that the gap between the two groups is large enough to eliminate the benefits of rebalancing.
Also, the risk-on/risk-off trade that affects emerging-markets performance may be mean-reverting. Central bankers loosen their monetary policies, investors gain confidence and pursue riskier assets, emerging-markets securities flourish, central banks grow concerned about asset inflation and signal that they may tighten, investors become worried, they lose confidence and sell riskier assets, emerging-markets securities decline, central banks grow concerned about asset deflation and signal that they may loosen, and so forth. The theory is more anecdotal than proven, but it strikes me as provisionally correct. 

Performance Chasers Come Back to Emerging Markets...Not Surprising

Below is a graph of the  last 3 months of performance in emerging markets in the chart below for SPY (S+P 500) in blue .GMF (emerging asia) in gold and IEMG  (overall emerging markets) in green (growth of $100,000) with both the emerging market indices up  a bit over 9% more than twice the return of the S+P 500 at 4.3%/

Thus it was not surprising to see this article in the WSJ

Flows Return to Emerging Markets
Investment Flows Take Pressure Off Emerging-Market Governments
MICHAEL S. ARNOLD in Hong Kong, 
PATRICK MCGROARTY in Johannesburg and 
EMRE PEKER in Istanbul 
Updated June 17, 2014 1:29 a.m. ET
A fresh wave of investment inflows is taking the pressure off some emerging-market governments that had at long laststarted to tackle economic overhauls.
As investors fled from developing markets around this time last year, in anticipation that U.S. interest rates would climb when the Federal Reserve reined in its stimulus measures, central banks in Turkey, Brazil, India, Indonesia and South Africa raised rates to stanch capital flight and many nations promised tough economic measures to restore confidence.
Investment flows have since reversed, sparked by bets that interest rates will remain near zero in the West well into next year. That has allowed emerging-market nations to defer hard policy choices and could hold back world economic growth.
Investors pulled $32.5 billion out of stocks and bonds of 30 emerging markets in June 2013, the height of market turmoil, according to the Institute of International Finance Inc. Political upheaval in Ukraine in January led to a further bout of outflows.

But investors have pumped $221.7 billion into emerging assets over the past 11 months, including an estimated $45 billion in May, the highest monthly total since September 2012.

Shooting Star Stocks...Avoid Them

I have written before about the market phenomenon of “shooting star “stocks. Often these stocks involve companies whose products are highly visible and extremely trendy a product that seems to have infinite future sales growth. Investors (for lack of  better word) both individual and institutional flock to thee stocks and as price momentum builds and the price goes up, more buyers flock in. The inevitable result is that the valuations of these stocks make them “priced to perfection” a small disappointment in earnings prospects leads to the stock falling back to earth often quite rapidly.

At that time I had mentioned Lululemon (LULU) which took a large price earlier this week after a disappointing earnings report. It is now trading at half the price of its all-time high

But LULU was just one example. A recent article 
 by Michael Santoli reported the woes of once highflying women’s retailer Chico’s and cited a number of companies which research from Sanford Bernstein sees as potential candidates for leveraged buyouts because of the sharp declines of their stock.
These names are a virtual tour of your local mall all well-known and seemingly popular or (once popular) names in the midst of a booming US stock market at all-time record highs these stocks have seen large stock price declines. The article notes
Within a laggard retail sector, a crowded collection of long-established specialty chain stores selling clothes, shoes and accessories have struggled acutely.

This subset of retail, populated by tired “concepts” now on the wrong side of consumer preferences
Aside from Chico’s, the list includes Petsmart Inc. (PETM), Urban Outfitters Inc. (URBN), UGG boot maker Deckers Outdoor Corp. (DECK), Guess Inc. (GES), Buckle Inc. (BKE), Steven Madden Ltd. (SHOO), American Eagle Outfitters Inc. (AEO) and Fossil Group Inc. (FOSL).

Shares of these companies are down an average of 33% from their all-time highs,
The lesson for investors…just because the store seems busy or “everybody” is buying or wants the product doesn’t mean the stock is a good buy. Valuations may be high based on expectations of continued sales and profit growth. But being a “concept” by definition means it will be difficult to remain the darling of consumers forever. Better to check valuations rather than the crowds at the mall before buying stock in a company.

Wednesday, June 11, 2014

Emerging Markets Price Returning to Value ?

At  Mason Wev has an interesting article  arguing for a rebound in emerging markets

The first part of his argument is for mean reversion: the outperformance of US markets vs emerging has reached extreme levels and thus is ripe for a correction. He presents this graph to support his argument

When the chart data is positive, the S&P 500 has outperformed emerging markets over the past year; when the data point is negative, emerging markets have outperformed.

However I found the second part of his argument based on the low valuation of emerging markets vs the US. My general approach is that in the long term price returns to value thus the following table presented in the article presents some interesting numbers

You can see in the table below that emerging markets valuations are indeed compelling today:
IndexActionable ETFsP/E As Of 04/30/14
U.S. (S&P 500 Index)SPY18.69
MSCI Emerging Markets IndexIEMG, VWO12.20
MSCI China IndexGXC9.35
MSCI Russia IndexRSX, ERUS4.67
MSCI South Korea IndexEWY10.31
MSCI Turkey IndexTUR10.640

Looking at the list above Turkey and Russia would stand out as having high political risks relative that could well outweigh any compelling valuations.

Also of note is that IEMG the ishares core emerging markets etf holds just under 5% of its assets in Russia

Another etf worthy of consideration is GMF Emerging Asia which has a p/e of 12.39 roughly the same as IEMG the overall emerging markets fund. It office significant exposure to China without the need to add a single country fund to a portfolioL GMF allocation:

Fund Country Weights

As of 06/10/2014
United States0.25%

Monday, June 9, 2014

The Israeli Shekel is strengthening against the dollar…Why? What is the future outlook?

Israeli Shekel per $ One Year as of June 8, 2014

The Israeli Shekel (NIS) has been on a long term strengthening trend hitting a 12 month high (dollar low) of under 3.4500 in mid-May (see chart above). In May of 2012 it traded over 4.000.
While it is notoriously difficult to forecast exchange rates several factors are likely to continue:
What are the factors affecting the exchange rate?
Interest rate differential between the US dollar and shekel. The US central bank has indicated short term interest rates will remain low in the near future  which is likely to keep Shekel interest rates remain higher than the US dollar. The interest rate differential between the NIS and the Euro can affect both the Euro/NIS rate and the $/NIS rate. Recent activities by the European Central Bank indicate a long future period of extremely low interest rates.

Speculative flows into the shekel. As shekel rates remain lower speculators from around the world purchase dollars to earn the extra interest. In the financial markets this is called “hot money “because it moves quickly in response to market conditions. Furthermore if these speculators feel the trend is their friend they will increase their shekel purchases. An additional factor is inflows from Israeli exporters, foreign investors and corporations expanding their operations in Israel.
Policies by the Israeli Central Bank (Bank of Israel)
In an effort to stabilize the exchange rate the Bank of Israel has been “intervening “in the currency market buying dollars and selling shekels. Despite purchasing over $300 million dollars since the middle of 2012 the shekel has continued to strengthen. Since 2008 the bank has purchased $ billion and the rate is at virtually the same rate as 6 years ago.
Not only has the central bank intervention not slowed the rise of the shekel it has created losses for the Central Bank. As the dollar strengthens/shekel weakens the dollars held by the Central Bank decline in value.

But throughout financial history and around the world intervention seldom works to reverse a long term trend created by fundamental economic conditions. This has been the case for the Bank of Israel as well. Despite purchases of over in the last months the dollar has fallen from a 2013 high of over 4.0 to a recent low below 3.45
The Bank of Israel’s dilemma:
Central banks can only target one rate through their policies: either the exchange rate or interest rates. In order to reduce the long term attractiveness of the shekel, the Bank of Israel would have to lower interest rates….But lower interest rates lower mortgage rates and increase demand and prices for housing exactly the opposite of government policy.
Most recent economic data has indicated  slower growth in the Israeli economy and talk has increased of interest rate cuts. Even if that were to occur NIS rates would remain above those of both the dollar and Euro

What is the future outlook?
Exchange rates are very difficult to forecast and virtually impossible to forecast on a short term basis. The shekel may well have a short term weakening of 1% to as much as 5% without changing the fundamental trend. In fact on May 19 the exchange rate moved from a low of 3.4420 to 3.4950 before closing at 3.4750… a range of 1.5%.

As long as interest rate differentials vs the US and the ECU remain positive for the shekel vs. the dollar  and the Euro it will be a short term factor in the currency’s favor.  Even if the Bank of Israel cuts rates in response to recent slower economic growth and low global interest rates, the interest rate differential will remain positive for the NIS

Several long term factors argue for continued strength in the Israeli currency

Inflows from non-Israeli corporations and investors. Investors putting money into Israeli startups need to buy shekels to do so. Multinational corporations such as Intel already established in Israel need shekels to cover ongoing expenses and business expansion.

Corporations that have done ipos in the US or sold out to US companies have dollars to repatriate.

Israeli exporters a large part of the economy have dollars to repatriate from sales abroad.

If the above groups fear more weakening of the dollar they will accelerate their shekel purchases creating more momentum for a weaker dollar.

An important longer term factor will be the development of large natural gas reserves. Investments during the development stage will bring inflows of from abroad and purchases of local currency. Once developed gas exports would both generate revenues and reduce the need for $ denominated energy imports.

Recently appointed Central Bank Governor Karmit Flug acknowledged that the Bank of Israel has been intervening to slow the currency movements to give time for corporations to prepare themselves. But she noted the strength of the shekel reflects confidence in the Israeli economy which she expects to continue The central bank continues to indicate that while it may act to moderate exchange rate movements it cannot reverse long term trends based on economic fundamentals.
Perhaps those that would be adversely affected by a further weakening of the dollar vs. the shekel might take Ms. Flug’s advice and also prepare themselves for the possibility of a future stronger shekel.

On June 9 both Governor Flug and Bank of Israel  head of capital markets gave little indication of concern about the stonger shekel in their speeches at the Herziliya Conference.

The Marker/Haaretz reports:
Flug stated:

“The exchange rate is a very important data point that we look at,” Flug told the Herzilya Conference, an annual gathering of policy makers, on Monday. “We look at the dollar because of its impact on inflation. In the past, this impact was very strong, while today it is moderate. It has also had an impact on employment and [economic] activity.”
Flug said the shekel had experienced a sharp appreciation early last year but that the trend had moderated more recently.
Abir ;
Andrew Abir, the head of the Bank of Israel’s markets division, told the committee he had seen no signs of speculative trading recently 
But, as the article notes the exchange rate has become a political issu as the Marker reports:
In a Knesset Finance Committee meeting on Monday, lawmakers called for the central bank to set a minimum exchange rate for the shekel....the Manufacturers Association, a trade group for the country’s biggest industrial companies, reiterated a call to set a floor of 3.8 shekels to the dollar. Israeli high-tech leaders issued similar warnings on Sunday.

Thursday, June 5, 2014

Investor Performance Chasing...Again

It is probably one of the most constant aspects of financial markets...investors chase returns and more often than not sell close to the lows and buy close to the highs. With a major rally in longer term treasury bonds pushing yields to extreme lows(prices to highs with  ten year treasuries below 2.5% which way have etf investors moved..... reports

The single most popular fund last month was the iShares 7-10 Year Treasury Bond ETF (IEF | A-51), which gathered more than $5 billion. It was a fitting data point considering yields on benchmark 10-year Treasury notes dropped to 2.46 percent from 2.59 percent at the end of the April. IEF’s price, which moves in the opposite direction of its yield, rose more than 1.5 percent in May.

IEF has a current yield of 2.11% so its hard to see it as a good long term investment. But it is volatile with a duration of 7.5 years a 1% move interest rates creates a 7% change in price. Another way to look at the risk return is that a .3% increase in interest rates creates a price decline of 2.25% which is more than the one year yield.

Below is a 3 month price graph of IEF

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Tuesday, June 3, 2014

Emerging Markets Change Course

I see that back in September 2013 when I was last blogging frequently most of the investing world was giving up on emerging markets and wrote of taking a more positive longer term view.

Bloomberg reports on recent moves in emerging markets

Investor sentiment toward emerging-market stocks is improving after more than three years of underperformance versus their developed-nation counterparts. The MSCI emerging markets index has climbed 9.8 percent since mid-March, more than twice as much as the MSCI World Index. U.S. exchange-traded funds that invest in developing nations have lured about $8.7 billion of inflows during the period.

From the WSJ here
The speed with which investors appear to have forgotten losses of up to 30% in some markets has been startling. Money is flowing back into emerging markets at the fastest pace in more than a year.
Mutual and exchange-traded funds focused on emerging markets added a net $13.2 billion in April and May, according to data from EPFR Global through May 26. That is the biggest two-month rise since February and March 2013, and follows 10 straight months of net selling.

"All the stuff that got beaten up last year and in January this year is springing back," said Angus Halkett, emerging-market debt portfolio manager at Stone Harbor Investment Partners, which has $62.5 billion of assets. "It's like early 2013 when everything was fine. And we saw how quickly that sentiment evaporate
graph from wsj

My analysis coming in the near future