EM Fund Stock Picks & Country Commentaries (January 19, 2025)

As of early mid-January, a number of December or Q4 fund updates (our continuously updated post containing all funds is here) along with new research have become available. But first, a quick note about the Los Angeles wildfires:

During the the last couple of wet El Niño winters when I visited my parents in California, I spent most of the visits (between wet winter storms) hand knocking “mummy” nuts off a few thousand young almond trees (among other manual tasks needed for a new orchard to be well managed/maintained).

However, its been noticeably dryer the past year and the nuts came off much cleaner during the August harvest from the (now bigger) trees plus its dry enough for a shaking machine to still come in and knock remaining mummies as it hasn’t rained in weeks. So I have been doing a considerable amount of work around my parent’s yard and garden (as normally its very wet this time of year) during the day – why posts have been later than usual.

I assume California will now be having some (drier…) La Niña years which, like El Niño, has investment implications for commodity prices, Latin America (see this Utilico Emerging Markets Trust plc piece: Weathering the Market: El Niño and La Niña), insurers, etc.

And speaking of insurers: You better believe California insurers are familiar with El Niño-La Niña weather cycles – along with how badly mismanaged-unmaintained state owned land along with everything else is in the state (e.g. Pacific Palisades had no water pressure to fight the wild fires because a key reservoir was drained last February to fix its cover – apparently it takes at least a year just to fix a reservoir cover in CA!). That’s why insurers have spent the past year cancelling fire insurance policies in Southern California and getting the heck out of the state…

Note that California politicians/officials plus their trial lawyer donors are goig to be looking to blame everyone (but themselves and their policies) for the wildfire fiasco with Edison International (NYSE: EIX)’s Southern California Edison already in the crosshairs.

A look at PG&E Corp (NYSE: PCG) stock chart shows what happens when California politicians/officials are successful at shifting blame for wildfires and power crisis (caused by badly thought out partial electric utility deregulation policies) onto a publicly listed stock:

This time around, I think California politicians/officials will have a much harder time getting away with the blame shifting – especially with Trump in office and the noticeable political or vibe shift (how big of a shift and how much of it will penetrate CA remains to be seen…).

It does look like EIX’s chart is already starting to stabilize:

With that said, I would NOT be rushing into investing in any stock or investment directly involving California any more than I would rush into a stock or investment involving Zimbabwe, Venezuela, etc.

And now for some new fund updates and research starting with some non-EM focused pieces:

🔬🌐 How businesses are coping with the ever-increasing geopolitical risks (ING) – Ahead of the World Economic Forum in Davos at the end of the month, ING’s Global Head of Research Marieke Blom spoke with decision-makers of European organisations with a significant global footprint to see how they’re responding to the ever-increasing geopolitical risks
🔬🌐 Uncommon truths: The Aristotle List: 10 improbable but possible outcomes for 2025 (Invesco) – It is time to forget central scenarios and think about improbable but possible outcomes. The mixed market mood at the end of 2024 is reflected in our list of surprises (these hypothetical predictions are our views of what could happen even if they do not form part of our central scenario).
🔬🌐 Investment considerations for the second Trump presidency – With all eyes focused on the White House, investors must decide what the incoming President’s policies will mean for markets and how to position accordingly. Ahead of the inauguration, we asked our portfolio managers what they think should be front of mind.
🔬🌐 Plan for 2025: Predictions from Our Portfolio Managers (Van Eck) – To complement these macro-level insights, we asked our portfolio managers to share their outlooks for their respective asset classes and highlight the most significant investment opportunities. Their insights below provide a view across various asset classes, offering guidance to empower your investment decisions for the year ahead.

New Asia Fund Documents & Research

⏰🌏 Asian Frontier Markets Update (AFC) – We will host our regular quarterly webinar to update existing and potential investors on the performance and outlook for our funds. The webinar will be held on Thursday, 23^rd January 2025, at 8:00am NY, 1:00pm UK, 2:00pm Swiss, and 9:00pm HK/SG time and will be recorded for viewing at your convenience. During the webinar, we will discuss the following key points:
- Drivers of performance for the AFC Asia Frontier Fund in 2024
- 2025 Outlook for the AFC Asia Frontier Fund
- Key catalysts for the AFC Asia Frontier Fund going forward
- Key country and stock picks for the AFC Asia Frontier Fund
- 2025 Outlook for AFC Iraq Fund, AFC Uzbekistan Fund, and AFC Vietnam Fund

New Asia Fund Documents & Research

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