Money Rushing Into the US Will Reverse (Moneyweb.co.za)

• Developed markets are not nearly as attractive as emerging markets, reckons Feroz Basa from Sanlam Investments.
• Now [if] you bring that back to EMs, if you look at the emerging markets currently [they are] trading on very, very low earnings multiples, and the earnings level is low, whereas developed markets’ earnings are high. Valuations are starting to come off, but they’re not nearly as attractive as emerging markets.
• In emerging markets there are a number of state-owned entities, particularly in China. If you look at the index – China, India, and some of these other indexes – you’ve got to be very careful [of] those state-owned entities. I mean, we look at Eskom, Denel and all these other state-owned entities. [They are] not run for shareholders. Similarly in emerging markets you need to navigate those markets quite carefully and spend time. There are really very, very good companies, but you need that bottom-up, fundamental-focused fund that can pick those stocks for you to give you that outperformance longer term. READ MORE

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