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80 votes

What stops you from using fixed income in developing countries?

assuming the currency value with respect to USD stays stable in that year. This is where your analysis breaks down. The fact that the foreign bond pays a higher interest rate indicates that the ...
D Stanley's user avatar
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32 votes

What stops you from using fixed income in developing countries?

Because currency risk is not the only risk in this scenario. The risk of the developing country (the state) not servicing their obligations are the bigger risk, hence the very high interest rates. ...
ssn's user avatar
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19 votes

What stops you from using fixed income in developing countries?

The other answers are correct, but I would like to explain the problem from a different perspective: When some scheme seems to offer you free money for nothing, then you should always ask yourself ...
Philipp's user avatar
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13 votes

Is it risky to move from broad geographical diversification into investing mostly in less developed markets?

what else is wrong with focusing on less developed markets exclusively? Less developed markets are risky, because they're volatile and prone to high inflation. That means you can lose a lot of money....
RonJohn's user avatar
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4 votes
Accepted

Which % of the global economy is considered "emerging"?

The company that runs the fund (Vanguard) on their website has the information on the general breakdown of their investments of that fund. They tell you that as of July 31st 2016 it is 8.7% emerging ...
mhoran_psprep's user avatar
3 votes

Is it risky to move from broad geographical diversification into investing mostly in less developed markets?

This depends how you define risk. In the sense your portfolio will be substantially less diverse and likely more volatile, this is indeed more risky. What you suggest is a form of timing the market, ...
Vality's user avatar
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3 votes
Accepted

Countries considered "emerging markets"

Blackrock's Emerging Market ETF is based off of MSCI's Emerging Market Index. So the ETF will include the countries in the index and the established procedure is that when a country is no longer ...
rhaskett's user avatar
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3 votes

Countries considered "emerging markets"

One company that has a publicly stated methodology regarding market classifications is MSCI. They have a document called the MSCI Market Classification Framework that has various criteria for ...
Richard at NorgateData's user avatar
2 votes

Why doesn't the emerging markets index reflect GDP growth?

GDP being a measurement for an economy's growth and with the stock market being driven (mostly) by company profits you would expect a tight correlation between GDP growth and stock market performance. ...
Koen vd H's user avatar
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2 votes

Question about Emerging Market index - EEM ETF

MCSI is an organization like Standard & Poors (S&P). The MCSI Emerging Markets index is some index that MCSI keeps using some indexing methodology. Separately there are funds that seek to ...
quid's user avatar
  • 49k
2 votes

Should I invest everything in emerging markets ETF when I'm young?

"Lifecycle investing is growing in popularity in the industry" this too shall pass maybe you'll get lucky and retire with the expected returns but what if you don't? remember that irrational markets ...
michael's user avatar
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1 vote

What stops you from using fixed income in developing countries?

What you are describing is called Interest Rate Parity but without considering your fx risk (after earning interest in the foreign currency will I be able to buy the domestic currency back at the same ...
JSharm's user avatar
  • 111
1 vote

What stops you from using fixed income in developing countries?

Their interests rates are not high because the borrowers are stupid. They are high because they have a lot of inflation, so the 1 billion simoleons you borrow today is worth a lot more than the 1 ...
Money Ann's user avatar
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1 vote

What stops you from using fixed income in developing countries?

IMHO, this is a bad idea unless you understand the economy of the country you mentioned. No two country is the same when coming to similar high bank interest rates. There is a chance that the ...
mootmoot's user avatar
  • 4,183
1 vote

Physical replication ETFs that do not pay out dividends

To expand on the answer of @user11865 , you can also look these ETFs with the keyword "accumulation", as opposed to "distribution". i.e. Instead of distributing the dividends, these are reinvested, ...
Calculus Knight's user avatar
1 vote

Should I invest everything in emerging markets ETF when I'm young?

Apples to Oranges The idea "invest in risky stocks when young" is based off historical analysis of major Western stock markets. Basically, the New York Stock Exchange is positive over any 30 ...
codeMonkey's user avatar
  • 1,639
1 vote

Should I invest everything in emerging markets ETF when I'm young?

That you want a high risk, high reward investment makes perfect sense. What is a potential downside to this is that emerging markets can go down together. Emerging markets generally provide products (...
JFugger_jr's user avatar

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