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FTBvish

Far East/emerging Markets

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Folks,

What are you opinions on Far Eastern markets at the moment? I see that many are calling an end to the recent global equity run, and am wondering whether this includes these markets..

Reason I ask is because I've just bought my first shares ISA... I know - buying at the top etc... but the reason for doing it is I want to have a vested interest in the markets so that I pay attention more. I've opted for the following:

£1000 IShares Korea

£500 IShares Japan

£500 IShares Taiwan

£500 IShares FTSE/Xinhua

£500 IShares Brazil

(also £1000 JP Morgan Natural resources fund)

I am particularly interested in opinions on the above indexes, but generally looking to understand the future direction of these markets.

I'm currently 85% Cash, and 15% Shares (above).

I plan to use my £7K ISA allowance next year (£3K will be cash), but will wait for the right time...

Thanks in advance :)

Edited by FTBvish

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The far east/emerging markets could be a good bet. I think they will outperform western markets. Japan is coming out of a 10 year recession, and the Nikkei has nearly doubled from it's nadir a couple of years ago. The bulls are firmly in control at this stage.

Don't really follow the other markets you list, but if the local economies are strong, there's a good case for the markets performing well.

You'll always get people who are calling an end to a bull/bear run and eventually they will be right, but markets are notorious for continuing on for longer than most comentators predict, as the virtuous cycle keeps feeding itself. I wouldn't call an end to the bull run yet, although a pullback in all major markets soon wouldn't surprise me.

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Guest wrongmove

I've opted for the following:

£1000 IShares Korea

£500 IShares Japan

£500 IShares Taiwan

£500 IShares FTSE/Xinhua

£500 IShares Brazil

A bit OT, but how did you buy Brazil, Korea and Taiwan ? I have a few Xinhua, and I can get Japan, but the others do not seem to be listed in London, only in Germany.

I read an article about the fundamentals of these markets. Their growth has been explosive so I assumed they would be expensive. But not at all ! Brazil has a PER of about 12, IIRC. It wasn't the lowest. India was the most expensive in P/E terms at 20, but most other emerging markets were low, some in single figures. The economies look good to - budget surpluses and trade surpluses are common. I will try to find the article again and post a link.

I'm confident that these markets will offer good returns long term to someone buying at today's prices, but I am equally sure there will be many bumps in the road. A lot of the recent growth has come from commodities, which may be in a bit of bubble, for example. Politics can always throw a spanner in the works too, so diversification, as you are doing, seems a good idea.

Have you consider Investments Trusts ? Some are very diverse, all in one share. Spreads are usually ok, but more than iShares, and you have to pay stamp duty. A list can be found here: Emerging Economies ITs

All IMHO of course, and my cash/equities ratio is almost identical to yours, so I am no expert :)

Disclosure: I hold a few iShares Xinhau, iShares Eastern Europe and JPM Emerging Markets, all as small, speculative long term holdings.

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A bit OT, but how did you buy Brazil, Korea and Taiwan ? I have a few Xinhua, and I can get Japan, but the others do not seem to be listed in London, only in Germany.

I read an article about the fundamentals of these markets. Their growth has been explosive so I assumed they would be expensive. But not at all ! Brazil has a PER of about 12, IIRC. It wasn't the lowest. India was the most expensive in P/E terms at 20, but most other emerging markets were low, some in single figures. The economies look good to - budget surpluses and trade surpluses are common. I will try to find the article again and post a link.

I'm confident that these markets will offer good returns long term to someone buying at today's prices, but I am equally sure there will be many bumps in the road. A lot of the recent growth has come from commodities, which may be in a bit of bubble, for example. Politics can always throw a spanner in the works too, so diversification, as you are doing, seems a good idea.

Have you consider Investments Trusts ? Some are very diverse, all in one share. Spreads are usually ok, but more than iShares, and you have to pay stamp duty. A list can be found here: Emerging Economies ITs

All IMHO of course, and my cash/equities ratio is almost identical to yours, so I am no expert :)

Disclosure: I hold a few iShares Xinhau, iShares Eastern Europe and JPM Emerging Markets, all as small, speculative long term holdings.

IShares in those markets are available though my broker - Squaregain :)

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  • 335 Brexit, House prices and Summer 2020

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      • down 5% +
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