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Emerging Market Equities

I am trying to form a view on emerging market equities and thought I'd ask the discussion board for thoughts.  What strikes me as odd is that when I look at ETFs like EEM and IEMG they have basically done nothing over the last 9 years.  I say it's odd because the general consensus seems to be that QE has been a massive support for emerging markets allowing countries and companies to finance debt at very cheap rates.  Obviously, that's changing now, but still over the last 9 years the equities have largely gone no where.  In the meantime, the S&P500 is up approximately 170%.  I recognize the dollar and FX clouds the ETFs' performance, although when I looked at the major currencies like the Korean Won etc, they have not moved THAT much over the last 9 years.

The idea that investing in emerging markets gave you exposure to faster growing companies and economies, new growing middle-class consumers, etc...has that really been true?  Looking at the last 15 years, EEM has returned just under 9% per year compared to the SPY at just over 9%.  I guess I'm wondering are emerging markets even worth the bother if they are not delivering superior returns over 10, 15 year time frames?

Quick general comment: Do a ton of research in a country you know at least a little about and pick individual stocks. Funds have all the same risks, maybe more - yes sure they offer diversification (which can be a great thing) - but they also include so many dogs and companies you would never buy into.
You said it right already, over a long period of time SPY and EEM both return pretty much the same. That is why you want to a piece of emerging market for diversification as pablo8 said. Given the US market is more expensive than international market, it may be the time to balance the portfolio a bit. Given I am retired (Today is my 3 rd day after retirement), my first goal is to reduce risk.
I am a lazy portfolio guy, but I do believe that Emerging market need a bit more "active". I started buying a little international and emerging market a bit at a time, but with FEMKX rather than EEM. Over a long period time, FEMKX appears to do better than EEM.
Yes, to be fair emerging markets have certainly provided periods of outperformance and are well worth diversification.  I guess I was just expecting over a very long time period that EM should give you greater returns than the U.S.  That said, if you compare EEM to say the MSCI ACWI ex-U.S., then the EEM has outperformed over the last 15 years.  The bottom line maybe is the U.S. has benefitted massively from generally having pro-market governments.  What will happen if the U.S. ever has a more socialist government...we become the EU...uh oh :-)
Have you considered IXUS (= IEFA + IEMG) or IEFA instead of just IEMG/EEM? I dumped IEMG in favor of IXUS/IEFA recently.
Currently, the US is raising interest rates.  That is making the dollar stronger.


A stronger dollar is making it harder for foreign companies with dollar-denominated loans to make payments. The stronger dollar is also making the foreign companies asset values and their earnings worth less to someone in the US.

Maybe a good time to buy?
I guess if the dollar weakens it would be great.  Gundlach this week said ultimately the dollar weakens.  EM valuations looks better than they have.  And buying after a crush is always a better place to start.
personally don't agree with advisors who prescribe a fixed mix of stocks and bonds with fixed sub categories of large, medium and small cap domestic/developed international/emerging markets. The fact is that there can be long periods of time where emerging markets and the other categories can be good and long periods where they can be bad. During the great recession, it was a great time to be in bond funds. However they've been consistently losing money in recent months as interest rates rise. So too, in emerging markets, they did quite a bit better than the broad US market for most of 2017, as you can see in this comparison of IEMG and ITOT.
This turned around early this year however with ITOT up 3.45% and IEMG down 17.53%. My approach is to include emerging markets if and only if they're on an upward trend, and as things start to sour, I reduce or eliminate them. I find graphs really useful for this purpose. There's was no question in the lower graph even by early May that the trend was not only downward, but looking worse than alternatives such as ITOT.
Beginning 2017 IEMG was $44. It peaked Jan 2018 at $62. That is a 40% increase. From Feb 2018 to last month, it went down about 14%, when I sold it. I did not like its downward momentum. The unresolved tariff issue and devaluation of foregn countries currency were/are having adverse effect. Equally important in my selling rationale, was that US centric companies and their stocks are outperforming the rest of the world. So I also sold my Europe ETF and China ETF. Reinvested in broad based, dividend yielding US based companies via low cost ETFs. Seems to have been a good move thusfar...

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