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Mexico, Chile and Columbia maintained strong growth metrics

The Latin American growth gap, or the rate of growth differential between countries measured by GDP, may have peaked in 2012 according to HSBC analysts.

While Brazil and Argentina showed signs of deceleration, Mexico, Chile and Columbia maintained strong growth metrics.

HSBC says “In the case of Mexico, a virtuous cycle of initiatives by policymakers and investment decisions by firms appears to be emerging. In Brazil, we currently observe the opposite”.

Forecasts for GDP growth in the region come in at “4.8% for Chile, 6.2% for Peru and 4.3% for Colombia”.

Both the Excel Latin America Bond Fund and Excel Latin America (Equity) Fund are two great investment vehicles helping Canadian investors capture the tremendous economic performance opportunity of the Latin American region. With geographic diversification and leading portfolio managers managing an Excel fund we aim to provide investors with both value, strength and expertise.

Written by Jack S.

Read More:
http://www.emergingmarkets.org/Article/3138072/Economics-and-Policy/Latin-America-outlook-Brazil-may-rebound-this-year.html

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After a year like 2012 Global EM Bonds are likely to become more pervasive and nuanced

After a year like 2012 Global EM Bonds are likely to become more pervasive and nuanced according to Baron’s writer Reshma Kapadia.

Citing Jan Dehn, co-head of research at emerging markets shop Ashmore Investments Management, Kapadia writes that “ the great unwind”

of developed economies may become a real problem as heavy debt loads and current account deficits start to gain significantly more traction with investors.

 In terms of strategy, Dahn points out the low correlation of EM/Global government fixed income and attributes continuing  trade as a macro rotation by investors such as himself. Dhan also goes on to point out that EM government  (locally denominated) fixed income insulates investors against weakness in the US Dollar.

Needless to say, we at Excel Funds still firmly believe in the growth of this asset class and offer investors the Excel High Income Fund.

The High Income Fund is a great vehicle that helps investors earn real yields in a low interest rate environment while on exposing portfolios to low-medium risks.

 Written by Jack S.

Read more:

http://blogs.barrons.com/emergingmarketsdaily/2012/11/26/asset-allocation-to-gain-importance-for-em-bond-investors-ashmore/?mod=google_news_blog

 

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.


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Latin American Middle Class Grows by 50 Million

Back in 2003, the middle class population of Latin America and the Caribbean was about 103 million. In 2009, it was an estimated 152 million, an increase of almost 50 percent. The increase is due to a successful result of the economic policy by Latin American and Caribbean governments. But the lower class has grown even larger, according to a recent report by the World Bank. Jim Yong Kim, President of the World Bank, says that one third of the population is still in poverty. Although little progress was made in the region to reduce poverty and grow the middle class, more recent changes show that this impressive boost is due to economic stability and growth in the region along with more recent changes emphasizing the delivery of social programs.

 

Middle class within LAC are not considered rich but are economically secure – or have less than 10% chance of slipping into poverty. An earning of at least $14,000 per year, would put a family of four into the middle class. A household making less than $4 a day is considered poor, while those earning from $4 to $10 are economically vulnerable. Today, the middle class and the poor account for roughly the same share of the population – 29% and 31% in that order – while the economically vulnerable now make up the majority. A rapid growing middle class only means positivity for the economy and investors.

 

Written by Melissa W.

 

http://abcnews.go.com/ABC_Univision/News/latin-american-middle-class-grows-50-million-world/story?id=17711973


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Why have Emerging Markets Equities responded favourably?

The Wall Street Journal’s Jake Lee discusses some of the reasons why Emerging Markets Equities have responded favourably, recently.

Jake mentions the recent spate of “easy money” policies out of the Federal Reserve Bank, in the US, a “dovish” ECB which recently cut rates by .25 bps and introduced its’ new bond buying program.

“If you had invested in Asian stocks you couldn’t have gone wrong” Mr Lee mention went to cite broader indices in Thailand which have risen as much as 28%.

 

The Excel Emerging Markets fund, recently recognized with the 2012 Lipper Awards for best EM equity Fund over 1 year, makes a compelling investment vehicle for investor portfolio exposures to the Emerging Markets. The fund offers broad diversification, strong and active portfolio management as well as a proven track record.

Written by Jack S.

Read More: {Video} http://live.wsj.com/video/what-driving-investors-back-to-emerging-markets/3AFE3436-A14E-46C7-A52E-88975D650FB7.html#!3AFE3436-A14E-46C7-A52E-88975D650FB7


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The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

It was the second biggest debt purchase ever by the People’s Bank of China and came a week before the government comes out with its latest report on quarterly growth.

Economists expect it will show that growth has slowed for the seventh straight quarter.

But authorities are moving more cautiously than they did after the 2008 crisis, when the huge stimulus that helped China rebound also fueled inflation and a wasteful building boom.

China’s economic renaissance is now in its fourth decade. One of its striking features, in addition to its success, is its constant state of change. The types of goods produced, the degree of dependence on cheap labor, the relative openness of markets and currency, all have changed dramatically in the 33 years or so since Deng Xiaoping first began the reform movement. From most reports, it appears that more changes in the direction of economic openness are currently at hand. The current stimulus measure should provide some easing in keeping the short-term interest rates low.

Why does this progress take place? Could it be that the leaders of China have a vision of the future that entails a continuing opening of the economy? Could it be that the leaders of China have aspirations for the Chinese people that require that they become better off economically? Could it be that the leaders of China believe that China’s future will be built on education, creativity, personal discipline, and hard work? My guess is that the answer to all of those questions is “yes”.

With this week’s stimulus measure it is another sign that the Chinese are committed to have the economy grow at a faster pace than we have seen of recent times. China will no doubt the new top economic power in the world investors must wake up to this and be invested long-term and share in this success story.

Written by Sam A.

Source: China’s central bank boosts economy


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Institutions are increasingly searching for alternative yields…

Melanie Trimbell, of the Financial Standard, recently wrote Fund Managers are bullish on Bonds due to the recent announcement of QE3 and the ECB’s concerted bond buying program.

In an interview with Trimbell, Geoff Pidgeon head of asset management for HSBC in Australia said “ institutions are increasingly searching for alternative yields”.

The article does a good job of explaining the dynamics of the fixed income market in terms of local denominated fixed income and hard currency, or USD denominated, fixed income. Historically emerging markets offered higher yields but were not considered safe havens. However recent noticeable momentum in spreads and fundamental resilience in Asia’s corporate fixed income space has led to Asia fixed income having increased appeal.

The Excel Income Funds have done a great job for investors in participating in yield enhanced geographic areas ,such as Asian Fixed Income, as well as other regions that Sergei Strigo identifies as having momentum.

Written by Jack S.

Read more [webpage]: http://www.financialstandard.com.au/news/view/23140897


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TURN TO EMERGING MARKETS

It looks as though since the rally in domestic securities portfolio managers across the board are less bullish on domestic securities.

The fact of the matter is that Domestic evaluations are within line of expectations and emerging markets represent attractive evaluations on a forward

Basis. I have looked at the Hang Seng VS. TSX and have seen great value and upside in the Hang Seng.

 

Hang Seng

 

PE Ratio: 10.55

 

Forward Basis: 11.02

 

VS.

 

TSX

 

PE Ratio: 15.3

 

Forward Basis: 14.08

 

Canadian managers are most enthusiastic about emerging markets equities, with 62% holding a favorable outlook on the asset class

The evaluations on a forward basis for the Hang Seng in this example provides great value to investors with long term growth horizons.

Fundamentals of EM space is undeniable  with 75% of Global growth coming from EM Space and when by 2030 EM will represent close to

55% of global market cap, no surprise PM’s alike are bullish on this asset class.

 

As IA’s build portfolios they must keep in mind the opportunities and great evaluations to  have their clients situated for long term growth

Potential in economies that will soon be recognized as the largest in the world.

 

Written by Sam A.

http://www.advisor.ca/investments/market-insights/investment-managers-turn-to-emerging-markets-russell-91422