SCHE News and Press, Schwab Emerging Markets Equity From 06/07/21

We got another disappointing employment report last week. The US economy added 559,000 jobs in May, which was below expectations and disappointing. There are certainly remaining supply-side issues in the economy, which is what we should expect in a recovery from a supply shock. The pr...

At first sight, the yield increase in emerging markets local bonds so far this year is not significantly out of line with what we saw in developed markets. In some cases (the Czech Republic, Hungary and South Korea), central banks are already expected to tighten monetary policy. G...

IEMG is an exchange-traded fund that concentrates on companies in emerging markets from the Technology and Financial sectors. The ETF has outperformed the S&P 500, as emerging economies are recovering from the pandemic-induced recession. The ETF could continue outperforming th...

Risk-adjusted performance for the Global Market Index (GMI) continued to tick higher in May. GMI’s Sharpe ratio — a measure of risk-adjusted return – rose to 0.82 on a trailing 10-year basis through last month. That’s close to a pandemic high, but still...

Since offshoring contributed to the long-term disinflationary trend, it would seem to make sense that reshoring would contribute to an inflationary trend. The "reshoring will lead to higher inflation" argument revolves around differences in labor costs, which are much higher in the US...

Diversification remains key, as I've said a couple of times, and we'd always drive that point home. More broadly, as we think about asset allocation, we think that the convexity of equities look quite good in terms of a strong recovery, in terms of the early nature of a cyclical recov...

The Global Market Index’s (GMI) expected risk premium held steady at 5.9% annualized in May, matching the previous month’s estimate. The framework for estimating equilibrium returns was initially outlined in a 1974 paper by Professor Bill Sharpe. Keep in mind, too, t...

The major asset classes delivered across-the-board gains for a second month in a row in May. Everything apart from cash was up last month, led by a sizzling rally in foreign inflation-linked government bonds. The FTSE Russell World Inflation Index ex-US surged 4.0% last month, the...

As an expected wave of re-openings sweeps the developing world, a serendipitous set of external dynamics could fuel the post-pandemic recovery in the EM asset class. A strong manufacturing cycle and decade-high commodity prices are dominant drivers of what we expect to be a strong rec...

Several research studies have found significant liquidity risk premium in inflation-linked markets, both in developed and emerging markets. After substantial QE, G7 central banks now hold a high proportion of outstanding government debt, reducing the "free-float" in government debt ma...