emerging market equities at all time highs courtesy of etf buying principally by the japanese and other (eu) governments in a sober attempt at portfolio diversification with monopoly money
the emerging market bond risk premium (averages 5 % and now trades at 2.5%) is below the option adjusted spread for US high yields (3.5%) which in simple terms means that unenforceable bond contracts issued outside the US offer less return than those inside
underlying securities in em's are priced to some degree off of domestic economic factors and fund flows but the inescapable transmission is from em etfs' and foreign fund flows
to wit the smart money is turning
edz being the direxion funds 3x short offering for ems
the emerging market bond risk premium (averages 5 % and now trades at 2.5%) is below the option adjusted spread for US high yields (3.5%) which in simple terms means that unenforceable bond contracts issued outside the US offer less return than those inside
underlying securities in em's are priced to some degree off of domestic economic factors and fund flows but the inescapable transmission is from em etfs' and foreign fund flows
to wit the smart money is turning
edz being the direxion funds 3x short offering for ems
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