MSCI Emerging Markets Index The index, which measures the dynamics of the shares of the developing region dipped by about 30% from the highs in August 2014. However, the rebound from the February bottom was very good - analysts argue largest bond fund of PIMCO - on AMarkets materials.
US Federal Reserve hinted at the possibility of increasing rates this summer. If the rate increase - bonds become more attractive, and the paper developing region less attractive, being much more risky tool. However, not the fact that the Fed did raise rates. For example, Jeff Gundlach, the so-called king of bonds, suggests that the probability - about 50 to 50.
Analysts consider PIMCO offer a developing region as an object of investments of money for the following reasons:
1. Shares. The negative point for papers will soon be over. Commodity prices will be balanced - this trend has already started. Indices of wholesale buyers began to grow. If you look on the MSCI index, it turns out that the multipliers of price-to-earnings for the developing region traded with a 25% discount to stocks in developing countries. Bids dividend is slightly higher and the rate of yield of the securities below. Indicators cash flow for the region's developing countries is significantly higher (8% vs. 6%).
2. Currency. Currency markets in developing countries can be interesting because they have more liquidity and less risk of sharp price fluctuations. The most interesting Mexican peso and Russian ruble.
3. Bids. Interest rate curves hint at the attractiveness of developing countries in the region. If we talk about interest rates America, investors put into the market prices too much increase in the US Fed rate episodes. The Fed can easily deploy its strategy on its head if will understand that the US economy is worse -.. Ie, return to a favorite policy of ZIRP and monetary easing.