Hot Money Blowing Emerging Market Bull Conditions?
"It was the best of times, it was the worst of times ...," goes the memorable opening line of Charles Dickens' famous 1859 novel "A Tale of Two Cities". Dickens' sharp focus on dualities is analogous to today's macro investing environment.
Recent conditions in emerging and Western markets could not be more different -- robust versus anaemic GDP growth, inflationary versus deflationary backdrops and gushing versus trickling credit conduits.
Looking ahead, it is difficult to see a change in dynamics. If Western economies remain mired in soft conditions (which we expect for some time), then monetary policy will stay accommodative -- and perhaps increasingly unconventional and frantic. Under that scenario, expect Bernanke et al. to indulge in additional helpings of QE, with benchmark lending rates remaining tethered to near-zero.
This is the global paradox at hand. The tentacles of the Fed's monetary easing are reaching far beyond American borders. Collateral effects in international markets are running high. Chinese officials have been particularly vocal about their worries, citing "imported" inflationary pressures and heightened capital inflows from the US. But can emerging market asset prices remain elevated, driven by monetary easing in the West?
To read more: please click the following safe link to this month's ETFocus written by Tyler Mordy.
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Money Blowing Emerging Market Bull Conditions?
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Author: Tyler Mordy
Tyler Mordy
Hahn Investment Stewards & Company
Inc.
Hahn Investment Stewards & Company Inc.
Global Fund Management & Investment Counsel
Ontario: The Exchange Tower, 1800-130 King St. W., Toronto, ON M5X 1E3
British Columbia: P.O. 2609, Station R, Kelowna, BC V1X 6A7
Phone: (888)-957-0602 e-mail:information@hahninvest.com
Tyler is regarded as a leading expert in the burgeoning field of exchange-traded funds (ETFs) and writes an influential, bi-monthly publication called ETFocus. He is a recognized innovator in the design and application of actively-managed ETF portfolios. Tyler's expertise is widely acknowledged, and he has been interviewed by several notable publications including The Wall Street Journal's - Smart Money and City Wire - Guide To Exchange Traded Funds.
Tyler Mordy is a portfolio manager and Director of Research at HAHN Investment. Since joining the firm in February 2003, he has made key contributions in the development of the firm's proprietary portfolio systems. A member of the HAHN Investment Committee, he is engaged in top-down strategy, investment policy and securities selection.
Previously, Tyler began his career at Deutsche Asset Management in London, UK. He earned his bachelor's degree in both Mathematics and English Literature at the University of British Columbia. Mr. Mordy is a CFA charterholder.
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