Managed Funds Emerging Markets Funds

Discussion in 'Shares & Funds' started by Lam Thieu, 6th Jul, 2008.

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  1. Lam Thieu

    Lam Thieu Well-Known Member

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    Doesn anyone think it's a good idea to invest in these sort of funds now. I mean with all the global turmoil and raising interest rates around the world, is is now a good time to buy if you are looking long term.

    I've got a China Fund (Challenger), but that's been doing terrible recently. Looking to stretch out a bit to more global funds...but am weary of the global resources, not sure if we're at the peak already.

    With Emerging markets, things are bound to look good for the long term investor right?

    BTW - Emerging Market Funds seems to charge a ridiculous MER, is there one which offers one below 2% without have to go wholesale. I'm looking for one with a minimum entry amount (i.e. $1000, and slowly grow with monthly injections).
     
    Lam Thieu, 6th Jul, 2008
    #1
  2. crc_error

    crc_error The Rule of 72

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    If you are looking at growing your portfolio with monthly contributions, you should not worry what the market is doing in the short term.. if fact dropping prices means you buy more..

    So allocating say 10% into emerging markets could be a good idea in a well diversified portfolio.. long term these markets should do well, so enter with a 7 year view, and don't get side tract with short term price drops.

    Everything is on sale at present, with PE ratios at 20 year lows, so you should not be worried about buying stuff now..

    Plus your dollar cost averaging will work well in this environment.
     
    crc_error, 8th Jul, 2008
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  3. D&K

    D&K Well-Known Member

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    I used to have Platinum Asia, had good returns but quite volatile. I'm glad now that I got out because it has dropped heaps; however, I suspect a lot of this seems to be attributable to the exchange rate. I had thought Aisa again, but have to wonder if the combination of exchange rates (if they continue up) and if Aisa slows, will it be worth it?
    Has our dollar reached the top yet?
     
    D&K, 8th Jul, 2008
    #3
  4. Tropo

    Tropo Well-Known Member

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    "Has our dollar reached the top yet?"

    It may hit 0.9935 :eek:
     
    Tropo, 8th Jul, 2008
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  5. D&K

    D&K Well-Known Member

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    Accuracy to 4 decimal points, bonus! :p
     
    D&K, 9th Jul, 2008
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  6. Tropo

    Tropo Well-Known Member

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    At the moment AUD/USD = 0.9504:p
     
    Tropo, 9th Jul, 2008
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    It's also worth having a look at iShares ETFs - there are a variety of funds you can use to get exposure to OS markets.
     
    Simon Hampel, 9th Jul, 2008
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  8. PennyWise

    PennyWise Active Member

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    Two words Vanguard and Dimensional. :)

    Low MER, passive index, tax effective and have been good performers.

    But listen to CRC_error and observe proper asset allocations and investment horizon.

    Cheers,

    PW
     
    PennyWise, 10th Jul, 2008
    #8
  9. Nodrog

    Nodrog Well-Known Member

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    I also agree with Sim about the iShares plus very cheap MERs. However if you only want to make small regular contributions the brokerage on small trades may not be cost effective. So unlisted funds like Vanguard (although relatively expensive on MER compared to ETFs) would probably work out cheaper in this instance.

    Also of interest as mentioned in an ASX presentation recently when investing in Emerging markets you probably don't want the fund hedged. As these economies grow their currency will probably strengthen along with it. So by being unhedged you may get both the economic and currency growth. Not much of an economist I'm afraid but sounds logical.

    Cheers - Gordon
     
    Nodrog, 10th Jul, 2008
    #9
  10. Lam Thieu

    Lam Thieu Well-Known Member

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    How does the MER fees get levied on your ETF.....let's say i bought 100 IShares on the ASX.......wouldn't the purchase be like any normal share purchase?
     
    Lam Thieu, 7th Sep, 2008
    #10
  11. Simon Hampel

    Simon Hampel Founder Staff Member

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    An ETF is a cross between a share and a managed fund.

    You purchase it like a share, but it operates like a managed fund (although with some key differences in the detail that don't really matter to normal investors).

    Funds which charge an MER typically calculate them daily - so if there is something like a 0.25% MER, the fund manager will calculate: (0.0025 / 365) * NAV (where NAV = net asset value of the fund) and deduct that amount daily from the fund holdings.

    The main difference from a purchase / sale point of view is that an ETF (like all shares) has brokerage costs - you pay your broker to buy and sell the shares ... while a managed fund charges you a buy/sell spread instead, which is used to cover the costs of brokerage of buying and selling the underlying shares that your transaction impacts on.
     
    Simon Hampel, 7th Sep, 2008
    #11
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