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Speaking of food is the spice of foreign investing doubling investors -- these -- during the week.
That ended June 12 mutual fund and ETF managers pulled out.
Eight point nine billion dollars worth of investment in emerging markets so -- emerging markets -- just beginning or deal.
Item on the -- elect asking Michael Cass he's known as knowing all about this -- -- emerging market bond portfolio manager.
You think the exodus will be short lived but that this moment in time creates a really good buying opportunity why.
Well it's certainly -- after it's been a very significant selloff -- below we really see happening this is what -- call and meaner version in the flow of capital what happened.
Post quantitative easing after the crisis a lot of that.
Quantitative easing liquidity capital migrated into the emerging markets because of the superior fundamentals.
But then we had we saw some overheating -- a lot of these countries in in recent times starting with China Brazil and more recently Indonesia.
There's been a tightening in response to that in order to you know in order to support the currencies in order to combat the -- you approach.
Right in the mix -- so what's departed equal partner of these it's not I mean it's so huge how much of big -- overall slowdown emerging markets is due.
To the slowdown in China specifically because a lot of these emerging markets depend directly on China.
So it's definitely a big factor particularly in the commodity driven countries because as China is shifting.
From an infrastructure driven investment driven economy to a consumption driven economy.
That's putting you know me causing everyone to revise down their forecasts that that that the growth of supply as demand.
Four commodities so that's hurting countries particularly Brazil.
You could say Indonesia Russia all of the you know heavy commodity export countries that's hurting the currencies there as well and that's one of the things that -- recently set off.
You know -- off this is route -- and really across all emerging markets they're not all equal there are certain countries that are beneficiaries of the environment.
And we look for stocks all around you know all in all the all the markets and we can find opportunities.
-- just about any environment so at the moment let's make this really valuable for investors who are watching.
You have two tiered one of the best when it comes to emerging markets the broader picture and -- right narrower picture start with a broad.
Okay so the -- -- what -- kind of introduced which is to say we've got this meaner version it's a necessary meaner version in the flow of capital because capital became too cheap.
All that money flowing into these countries drove down interest rates -- capital and started over he does it really takes the heat off of the politicians in these countries.
And they can I got a free pass and they stopped.
This up -- driving political and economic reform which is what I really want to see in these countries and and in essence you're saying go to new technology go to.
We can keep that up there so people can see exactly what they should be looking up -- But the new technology issue you feel that an emerging markets there's real opportunity there.
This was hasn't yet there's a huge steam I would say you know we we understand the -- the Internet in the importance of that as a platform.
You know as a value creation opportunity for many industries -- in the emerging markets is more than just a technology platform thinking that as.
You know there are countries where you get not only transparency of prices across industries but.
Really it's social it's almost a political transparency it's -- countries that haven't had much of a it's a force of democratization.
So we're talking about a major social change and in a place like China for instance.
We -- the leading social network which is seen as way below -- -- is the parent company we think that's you know -- really interesting opportunity.
You know they're they're just beginning to monetize this year.
There way vote advertising gaming and and and and e-commerce business probably.
It is likely to -- three to 400 million in a cup.
He has that's about 3% of the total of mix that you have an in your particular fund that's but as you said pointed out earlier not all of these emerging market countries are equal.
And you have to distinguish the -- among them a little better I'm wondering based on.
The slowdown in some of these countries.
Some worse than others whether you're totally realigning your proportion in your funds -- You know we don't I don't dramatically change that but certainly on the margin of thinking that way and and and we will on the margin -- aware I wanna look for the next idea.
We will do that as an attorney general are you looking for -- might you change those those countries that are more depended on China for example -- you pull back on some of those and those that have internal growth like India for example might should double up on and we've done that.
And so yes certainly over the last six months a year that's what we've been doing.
So we've been increasing in places that are beneficiaries of this -- a softer commodity environment.
That would be India.
That will be Korea Taiwan.
You know and then then and there are some that are kind of balance where were holding holding our ground at a place like Indonesia Brazil there's two sides to it.
There are parts of Brazil that are doing really well there were prospering but there are parts that are really into performing Michael castle the parent -- -- to see you thank you Michael thank you appreciate it --
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