Gavekal Capital: A Quick Look At Leadership Trends In The Emerging Markets

Tuesday, July 22, 2014

A Quick Look At Leadership Trends In The Emerging Markets

So far this year, the MSCI Emerging Market index is outperforming the MSCI Developed World index by roughly 6%, using our equal-weighted sectors. The EM energy sector is the only one underperforming, while the telecom and information technology sectors are outpacing the MSCI World index by 19% and 17% respectively.

MSCI EM Sectors Performance

After this run, many sectors are approaching the threshold of overbought, where 80% or more of stocks are above their 200-day moving average. Interestingly, while telecom has been the best performing sector on average, it is far from extended across the board. Only 43% (of the 46 companies) are above their 200-day moving average. Utilities, on the other hand and similar to the developed markets, are the most technically extended sector.

MSCI EM Sectors Percent Above Moving Average

MSCI DM Sectors Percent Above Moving Average

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
Blogs are posted by our investment team. Find out more about us at here. Read more about our strategy at www.gavekalcapital.com.

Disclosure

The information presented here is for informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful. An investor cannot invest directly in an index. Hyperlinks may be included in this message that provide direct access to other internet resources, including web sites. While we believe these links are to reliable sources, Gavekal has no control over the accuracy or content of information contained on these sites. Although we make every effort to ensure such links are accurate, up to date and relevant, we have no control over pages maintained by external providers. The views expressed by these external providers on their own web pages or on external sites they link to are not necessarily those of Gavekal.
The information listed on this blog is for example purposes only and should not be construed as the investment Advisor's opinion or investment outlook. As of the most recent quarter end, the named companies may have been held by the investment Advisor. Please review the most recent disclosures. For full information including additional policies and full disclosures on the Advisor, please visit our website gavekalcapital.com.