A question for anyone or everyone on this thread. Is the revival of Asian stock markets (as reflected in the performance of Asian mutual funds)a sign that the Asian economies are genuinely recuperating,or is it just due to investor bargain-hunting, or should I say bargain-hoping?
Let me explain why I ask what must sound like a naive question. In mid-1997 I dumped my Asia funds, fled Asia (figuratively speaking) and until recently I hadn't even thought of looking back. Once bitten, twice shy, and all that sort of thing. What finally tempted me to take a second look was the unexpectedly good performance this year of the Matthews Korea Fund and the several Japan small companies funds.
But I was not prepared for what I found today when running a search on the Morningstar site, which is that international mutual funds (a category that includes the lagging European ones) have been outperforming American funds for the past three months. Their one-month performance is even better. There are only five U.S. mutual funds on Morningstar's list of the 30 top-performing mutual funds for the past month (and only one of them is an internet fund). The rest: 10 Latin American funds, 7 Asia funds, 8 "developing countries" funds.
Furthermore, the average U.S. fund gained 1.4% over the past month; the average Latin American fund - 5.6%; the average Japan fund - 5.9%; and the average Asia fund (MINUS Japan) - 14.3%.
That looks very impressive. Yet the Lexington Troika Fund, which invests in Russia, has also been a stellar performer this year. I know Russia very well, I know its politics & its economics, and I would no more invest in Russia right now than I would jump off the George Washington Bridge. (The end result in either case would be the same.)
I do not know Asia, however, so it is difficult for me to assess the significance of recent Asian mutual fund performance. Thus, any comment from you folks would be appreciated!
jbe |
