Recently, the International Monetary Fund (IMF) increased their global growth expectations for both 2017 and 2018.
According to the report:
“The global upswing in economic activity is strengthening, with global growth projected to rise to 3.6 percent in 2017 and 3.7 percent in 2018.” The report also singled out “upward revisions in the euro area, Japan, emerging Asia, emerging Europe, and Russia.” The IMF also stated, “For policymakers, the welcome cyclical pickup in global activity provides an ideal window of opportunity to tackle key challenges—namely to boost potential output while ensuring its benefits are broadly shared.”
Dr. John Blank, Chief Equity Strategist at Zacks, recently polled other Chief Strategists regarding their views on global growth in several different regions and their views on future stock returns in those areas. The chart below shows the results of the poll.
John, goes into some excellent detail about ETF’s in these markets and also introduces some picks he believes are nicely positioned to take advantage of the growing global markets.
Given these growth expectations, we identified four highly ranked mutual funds that have sizable exposure to these top growth areas, no load fees, are relatively inexpensive, and have posted sizable gains year to date.
Ivy Emerging Markets Equity Fund (MUTF:IPOIX), a Zacks Rank #2 (Buy) seeks long-term capital growth. Consideration of current income is secondary principal objective. The fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities (including common stock, preferred stock and securities convertible into common stock) of companies whose securities are traded mainly on markets in the Pacific region, organized under the laws of a Pacific region country or issued by any company with more than half of its business in the Pacific region. The fund pays dividends and capital gains annually.
Current Regions Allocation: According to the last filing, IPOIX has 72.46% of their assets in stocks in Greater Asia, 12.35% in Emerging Europe, and 11.19% in Latin America.
Cost Specifics: There is no minimal initial investment, it has a 0.97% management fee with a total expense ratio of 1.19%.
Performance and Management: The YTD return is +35.58%, 1 year +28.26%, and 5 year +9.18%. IPOIX is currently managed by Jonas Krumplys who is a Vice President of Ivy Management Company. He currently carries a Zacks Manager rating of 2.8 (indicating that he has returned an extra +2.8% when compared to his peers with similar portfolios). He holds an MBA from the University of Chicago.
Top Holdings: As of the last filing, the top 5 holdings of the portfolio are; Samsung Electronics, Tencent Holdings, Alibaba Group, Taiwan Semiconductor, and Sberbank of Russia.
Fidelity International Small Cap Fund (MUTF:FISMX), a Zacks Rank #2 (Buy), seeks capital appreciation. The fund primarily invests its assets in non-U.S. securities, including securities of issuers located in emerging markets and in common stocks. The fund normally invests at least 80% of its assets in securities of companies with small market capitalization. Dividends and capital gains, if any, are distributed annually.
Current Regions Allocation: According to the last filing, FISMX has 46.02% of their assets in Greater Asia, 44.69% in Greater Europe, and 3.99% in Latin America.
Cost Specifics: There is a $2,500 minimal investment, it has a +1.0% management fee with a total expense ratio of 1.26%.
Performance and Management: The YTD return is +25.92%, 1 year +21.01%, and 5 year +14.05%. FISMX is currently led by Sam Chamovitz who holds a Bachelor of Arts degree in economics from the University of Pennsylvania. Sam has a manager rating of 2.2.
Top Holdings: As of the last filing, the top 5 holdings of the portfolio are; JSR Corp, Micro Focus Intl, S Foods, Wood GroupPLC, and Paysafe Group.
T. Rowe Price International Discovery Fund (MUTF:PRIDX), a Zacks Rank #1 (Strong Buy), objective is long-term growth of capital through investment in common stocks of rapidly growing and small to medium sized companies outside the U.S. The fund offers dividends (if any) and capital gains in December.
Current Regions Allocation: According to the last filing, PRIDX has 44.63% of their assets in Greater Asia, 47.34% in Greater Europe, and 4.82% in Latin America.
Cost Specifics: There is a $2,500 minimal investment, it has a +1.04% management fee with a total expense ratio of 1.19%.
Performance and Management: The YTD return is +31.06%, 1 year +24.92%, and 5 year +13.66%. PRIDX is currently led by Justin Thomson, Vice President of T. Rowe Price, who holds a M.A., with honors, in economics from Cambridge University. Justin has a manager rating of 3.3.
Top Holdings: As of the last filing, the top 5 holdings of the portfolio are; Vanguard FTSE All-World ex US small cap ETF, YOOX Net-A-Porter Group, MercadoLibre, Abcam PLC, IQE PLC.
Oppenheimer International Small-Mid Company Fund (MUTF:OSMYX), a Zacks Rank #2 (Buy) seeks long-term capital appreciation. The fund invests mainly in common stock of companies that are domiciled outside the United States or have their primary operations outside the U.S. and have market capitalizations of $2.5 billion or less.
The fund invests at least 80% of its net assets in equity securities of small-cap issuers. The fund invests at least 65% of its total assets in foreign securities. The fund is not required to invest a set portion of its assets in a particular geographic region or regions or a particular industry or sector. The fund offers dividends and capital gains, if any, annually in December.
Current Regions Allocation: According to the last filing, OSMYX has 26.42% of their assets in Greater Asia, 64.41% in Greater Europe, and 9.17% in North America.
Cost Specifics: There is no minimal investment, it has a 0.93% management fee with a total expense ratio of 1.16%.
Performance and Management: The YTD return is +30.17%, 1 year +23.29%, and 5 year +18.27%. The fund is managed by Rezo Kanovich, a portfolio manager, who holds a M.B.A. dual concentration in Finance and Healthcare Systems from University of Pennsylvania’s Wharton School of Business. Rezo has a management rating of 5.6.
Top Holdings: As of the last filing, the top 5 holding in the portfolio are; Lonza Group, NICE ltd ADR, H. Lundbeck, Lixil Group, and Carl Zeiss Meditec.
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