Emerg­ing choices

Daily Freeman (Kingston, NY) - - NATION+WORLD -

The hottest in­vest­ments this year have been emerg­ing-mar­ket funds, but not every­one is shar­ing in the spoils equally.

The top-per­form­ing mu­tual fund that spe­cial­izes in stocks from China, Brazil and other emerg­ing stocks re­turned nearly 35 per­cent this year through Fri­day. The worst-per­form­ing one, mean­while, lost nearly 6 per­cent. That spread of more than 40 percentage points is much wider than it is for funds in other cat­e­gories. And that means the penalty for choos­ing the wrong fund is much more painful for emerg­ing-mar­ket in­vestors than for oth­ers.

The cor­re­spond­ing gap be­tween top and bot­tom for funds in­vest­ing in big U.S. stocks is only 27 percentage points. For in­ter­me­di­ate-term bond funds, it’s 13 percentage points.

Mind the gap

30% 20 10 0 One rea­son for the dis­par­ity in per­for­mance is that “emerg­ing mar­kets” are com­posed of a di­verse group of economies. The MSCI Emerg­ing Mar­kets in­dex, which many funds bench­mark them­selves against, in­cludes China, the Czech Repub­lic, Colom­bia and 20 other coun­tries. These economies have dif­fer­ent kinds of com­pa­nies, dif­fer­ent driv­ers and dif­fer­ent per­for­mance. Brazil­ian stocks have re­turned 84 per­cent this year in U.S. dol­lar terms, for ex­am­ple, while Greek stocks have lost 22 per­cent. That wide menu of choices means ac­tive, stock-pick­ing fund man­agers have many op­por­tu­ni­ties to dif­fer­en­ti­ate them­selves from in­dex funds, whether for good or for bad.

Nearly 41 percentage points sep­a­rates the top-per­fom­ring emerg­ing-mar­ket stock fund from the worst this year, a much wider gap than for other cat­e­gories of funds. CSX CVS Health Ca­dence Chicos Co­caCola Cono­coPhil ConEd DineEquity Dis­ney DuPont Es­teeLdr ExxonMbl FedExCp GenElec GrCB NY s Har­leyD HomeDp Hubbell ITW IBM JPMorgCh Key­corp Kohls LabCp Lowes M&T Bk Man­ulife g Microsoft NatGrid Of­ficeDpt PDL Bio Pen­ney Pfizer Pier 1 Prax­air Proc­tGam PubStrg Rock­wlAut Rock­Coll RubyTues SearsHldgs Sta­ples Tar­get TimeWarn TrstNY UPS B Ut­dhlthGp Ver­i­zonCm Wal­Mart WsteMInc Well­sFargo Whole­Food CSX CVS CDNS CHS KO COP ED DIN DIS DD EL XOM FDX GE GCBC HOG HD HUBB ITW IBM JPM KEY KSS LH LOW MTB MFC MSFT NGG ODP PDLI JCP PFE PIR PX PG PSA ROK COL RT SHLD SPLS TGT TWX TRST UPS UNH VZ WMT WM WFC WFM 21.33 82.55 18.32 9.61 40.75 31.05 60.30 75.05 86.25 50.71 81.02 71.55 119.71 27.10 14.00 36.36 109.62 83.16 79.15 116.90 52.50 9.88 33.87 97.79 62.62 100.08 10.99 48.04 64.13 3.10 2.58 6.00 28.25 3.73 95.60 73.95 200.65 87.53 76.03 2.08 10.50 7.24 65.50 55.53 5.17 87.30 107.51 43.79 56.30 50.36 43.55 27.67 31.73 106.67 28.00 13.82 47.13 56.14 81.88 98.82 120.65 75.72 97.48 95.55 177.36 33.00 21.30 57.43 139.00 111.23 123.50 165.00 69.77 14.38 52.06 141.32 83.65 127.39 16.95 61.37 74.97 7.91 4.62 11.99 37.39 7.99 125.00 90.33 277.60 126.15 95.11 5.77 25.24 13.50 84.14 94.44 7.25 111.83 146.36 56.95 75.19 70.50 56.26 35.58 30.51 84.10 25.58 11.67 42.40 43.45 75.55 79.10 92.69 68.79 87.13 83.32 174.32 29.10 17.20 57.02 122.01 104.52 113.57 153.69 69.26 14.12 43.75 125.34 66.65 122.73 14.48 59.92 65.42 3.15 3.22 8.59 31.71 4.31 117.06 86.80 213.72 119.72 84.32 2.97 11.11 7.40 68.73 88.99 7.00 107.76 141.33 48.10 70.02 65.66 46.01 28.29 +.23 +.74 +.20 -.06 +.17 -1.52 +1.56 +.70 -1.16 -.66 +.72 -1.46 +.07 -.12 -.15 +.95 -1.57 -.08 -.27 +1.08 +.15 +.05 -.37 +1.34 -.38 +.66 +.01 +.05 +.76 ... -.07 +.11 -.22 -.11 -.38 -.04 +5.97 +.92 +.87 +.05 -.24 +.05 -.10 +1.52 ... +.06 +.98 -.11 +.03 +1.68 -.22 -.46 +0.8 +0.9 +0.8 -0.5 +0.4 -3.4 +2.1 +0.9 -1.2 -1.0 +0.8 -1.7 ... -0.4 -0.9 +1.7 -1.3 -0.1 -0.2 +0.7 +0.2 +0.4 -0.8 +1.1 -0.6 +0.5 +0.1 +0.1 +1.2 ... -2.1 +1.3 -0.7 -2.5 -0.3 ... +2.9 +0.8 +1.0 +1.7 -2.1 +0.7 -0.1 +1.7 ... +0.1 +0.7 -0.2 ... +2.6 -0.5 -1.6 +17.6 -14.0 +22.9 +9.4 -1.3 -6.9 +17.6 -6.6 -11.8 +3.3 -1.1 +6.9 +17.0 -6.6 +7.7 +25.6 -7.7 +3.4 +22.5 +11.7 +5.6 +7.1 -8.1 +1.4 -12.3 +1.3 -3.3 +8.0 -5.9 -44.1 -9.0 +29.0 -1.8 -15.3 +14.3 +9.3 -13.7 +16.7 -8.6 -46.1 -46.0 -21.9 -5.3 +37.6 +14.0 +12.0 +20.1 +4.1 +14.2 +23.0 -15.4 -15.6

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