Your Ticket to Investing in Emerging Markets Smarter than the MSCI EM Index. The Emerging Money EM Country Allocator Index (EMCAI) is a snapshot of Emerging Markets via a top down country allocation, providing a dynamic, broad-based look at Emerging Markets through country specific ETF's.
Each ETF in the index will capture the underlying country's fundamentals via specific stocks that make up each country's index in the MSCI, thereby giving investors exposure to the growth and EPS dynamics.
Why invest in 10 countries versus the 18 countries across Emerging Markets?
An index with ten countries can make more concentrated allocation calls while still offering significant diversification versus the traditional MSCI Emerging Markets model.
Emerging Markets allocation dynamics can often produce a set up where certain regions or countries will be out of favor or tactically unattractive. Certain countries may be too highly geared to a specific sector or cyclical backdrop.
The EMCAI will avoid those country allocations where macro or country specific index composition is not optimal and instead focus on allocating to country ETFs (countries) that present more immediate or near term drivers of outperformance relative to traditional Emerging Markets country allocation spectrums
We will present an index of the ten Emerging Market countries based on the following factors:
- Overall valuation attractiveness of a country
- Macro outlook of the country (including Politics and FX)
- Global asset allocation trends (broader asset class trends): DM equities, Credit, Bonds, Commodities, FX, etc.
- Event specific dynamics: elections, sector restructuring, rating upgrades/downgrades, political volatility, regional tensions
- Technicals: standard measures like RSI, moving averages, congestion levels, resistance/support, exhaustion measures
The index will be actively managed via a monthly rebalancing process that takes place in the first week of every month:
- Each monthly rebalance will present new weightings vs. the previous month indicating which countries have been added to/dropped from the index
- Countries will effectively be ranked from 1 to 10 by investment opportunity; these rankings will in no way be based on MSCI EM guidelines or ranking
- Subscribers will be given an investor's allocation tool which can allow investors to replicate and trade along with the index via their own online brokerage account
- Subscribers can use the index to simply trade one or multiple country ETFs to express a specific country investment approach rather than investing in-line with the index
- Subscribers will get access to an online video or live conference call with Tim to discuss the monthly rebalance and changes to the outlook