Crystal Ball: Emerging market returns?

[Totoro]

With a low P/E and poor returns the last few years, what does the interested folk think EM will do in the next 10 years? Mean reversion or not?

For sake of simplicity, assume VWO or similar.

[Edit] For sake of discussion: USD nominal returns.

 

[eta2020]

With a low P/E and poor returns, what does the interested folk think EM will do in the next 10 years?

For sake of simplicity, assume VWO or similar

I am optimistic on VXUS and VWO. It is partially due to the fact that they underperformed last 10 years.... just like S&P did 2000-2010. Also I read here threads were people are totally blue on non US markets. That is a positive contrarian sign.


I would not focus on Emerging Markets only. Even VXUS index is in a similar situation to VWO and has 20% of its index in emerging markets.

 

[W2R]

My crystal ball is broken!!

So, I went to the next in line, my back-up; my Magic 8-ball.

Below is a photo of what it said.

In desperation, I voted 4%-6%, although with all my forecasting technology on the fritz, I am clueless about this! So don't go by what I said.

 

[Ed_The_Gypsy]

I am shifting to SCV for US and a smaller fraction to EM for my foreign. Not all-in.

How will this turn out? Dunno.

Sent from my SM-G900V using Early Retirement Forum mobile app

 

[YVRRocketSurgery]

It seems like every year I've been reading analysts commenting that the EMs have bottomed and they should have good/great returns in the upcoming year.

I only have a small exposure in EMs but it would be nice to see some solid returns in the upcoming years.

 

[papadad111]

EM will be mostly dead money for another 5, maybe even a decade. I think those markets have to work through the Feds tightening cycle and then a loosening cycle before EM comes back to life.
My opinion ... International MM may be a better choice over the next 5 year horizon.

 

[Sunset]

I have a small amount in VWO and VXUS relative to everything else.

Some EM's are pretty messed up, so I'm not keen to bet much on it.

I think some of the increase will simply be the USD reverting to a more normal level compared to other currencies.

 

[NW-Bound]

It seems like every year I've been reading analysts commenting that the EMs have bottomed and they should have good/great returns in the upcoming year...

One of these days, the prediction will become real. Meanwhile I am patiently waiting...

Actually, my EM holdings have been coming back nicely recently. Still, they need to do more to offset the under-performance relative to the US S&P in the last few years.

 

[Totoro]

Past ten year performance vs. VT, for added flavor.

Seems most are more optimistic about EM (or ex-US) than the total (US) market.

I didn't realize P/E multiples were so low now, with a nice dividend yield as well and an ROIC on par with other indexes.

 

[explanade]

Wouldn't China have to return to around 10% GDP growth before the emerging markets take off?

Probably would mean oil would be around $100 and other commodities, which is what EM economies depend on, would have to see big huge price increases.

 

[dallas27]

I'm heavy VWO and buy anytime it drops. Am i smart or stupid, time will tell me.

Also have Vss, Veu, both with EM.


Sent from my iPhone using Early Retirement Forum

 

[Walt34]

I picked 4-6%, but bear in mind this is the guy who didn't buy stock in America Online because I thought the interface was so dumbed down no one would subscribe.

 

[FUEGO]

6-8%. It's beat down so I figure a percent or two above what most folks are predicting for US large cap like SP500. And within the 6-8%, probably closer to 8%.

I have a 5% allocation to emerging markets (Vanguard VWO and VEMAX), so not a huge deal either way. But it's one of the small slices of my portfolio that zigs and zags. Mostly zagging lately which means I've been rebalancing into it. My portfolio tracker says I'm at 6% now so maybe it's been zigging lately?