10 Emerging Markets to Watch in 2017: The Closed-End Fund Sentiment Indicator

200000 Vietnamese dong notes, worth less than US$10 each but more than most free financial advice

I have long been a fan, observer, and investor in emerging markets, ranging from the most frontier the most developed of emerging markets (often repeating that the US can be called “the most successful emerging market in history).  Anyone who knows me personally knows that this interest in emerging markets drove me to travel through 23 emerging markets from Turkey to Singapore by train in 2009, and that one of the main reasons I choose to live in Asia is to be able to see a wide variety of emerging markets (ranging from Korea to Burma and beyond) grow, change, and stumble in front of my own eyes.

The statistical side of me also likes following these same emerging markets by the numbers: both officially published statistics as well as through tradable stock, bond and futures prices.  One of my favorite indicators on the relative attractiveness of emerging markets as an investment is the closed-end fund sentiment indicator, where I look at how deep of a discount closed-end mutual funds tracking a given emerging market trade at relative to their more modern and scalable exchange traded fund (ETF) counterparts.  Below I list a quick reference table of 10 emerging markets that

10 Emerging Market Closed-end Funds vs ETFs:

Country Closed-end Fund ETF Weight in EEM
China (A-shares) CAF ASHR, CNYA 0%
China (Greater) GCH, CHN FXI, EWH, EWT 38.20%
Israel ISL EIS 0%
Turkey TKF TUR 1%
Singapore SGF EWS 0%
Indonesia IF EIDO 2.50%
Thailand TTF THD 2%
Chile CH ECH 1%
Mexico MXE, MXF EWW 3.40%
Korea KEF, KF EWY 14.60%
India IIF INDA, EPI 8.10%

Discounts of select emerging market closed-end funds as of Feb 1st, 2017


Source: WSJ

This is an excerpt and summary of my full article SeekingAlpha article “10 Emerging Markets To Watch In 2017: The Closed-End Fund Sentiment Indicator“.

If you have any questions about how to better invest in emerging markets, I’d love to hear from you through the contact form below:


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