With the cost of healthy food for India’s 1.1 billion people skyrocketing, processed sugar is becoming almost affordable by comparison. This is an opportunity for traders to adjust their exposure to ongoing shifts in global sugar consumption.
Traders hoping to limit downside risk with emerging markets bond ETF funds instead of stocks are getting nervous as once-high-flying funds falter. However, those looking to lock in big yield may get excited soon.
The headline performance numbers out of India have been terrible, but traders in India ETFs hoping to find shelter under the large-cap names are not exactly feeling great about their choice.
Normally considered the first to collapse in an economic slowdown, smaller and more economically sensitive emerging market ETFs are actually resisting the worst of the global market’s recent losses. This is not just a liquidity issue.
Look at the chart for just about any of your favorite emerging market stock, currency or commodity ETF and you’ll see things have gotten nasty all over the planet. This is when the inverse, short, or “bear” funds thrive.
With the banking sectors in two of the four BRIC markets — Brazil and China, facing short and long-term systemic challenges, Indian lenders have held up better than their counterparts, only to falter in the last few weeks.
The “dogs of the Dow” approach is well known in U.S. large-cap investing, but global traders can find endless ideas picking through the wreckage of the worst-performing emerging market ETFs as well. At the moment, the Global X China Materials fund (CHIM, quote) qualifies as the dirtiest dog at the table.
Talking about shifting planting patterns and China’s hunger for corn is all well and good, but in an environment where the U.S. dollar is riding high, just about all major commodity markets are feeling the pressure. Food is not immune.