Investors traditionally target emerging markets for higher growth opportunities, and China falls into that bucket. However, investing in China has always carried risks as the country remains clouded in secrecy, plagued with human rights issues and less transparent with capital markets.Now, with President Donald Trump in the White House, the relationship between the world’s two largest economies has become even dicier as the two trade barbs on tariffs and rare earth minerals, among other issues. Ticker Secur ...

Core Insights - The article discusses the rising popularity of emerging markets ETFs that exclude China, driven by geopolitical concerns and changing investor preferences [1][5][6] - Vanguard launched the Vanguard Emerging Markets ex-China ETF (VEXC), which aims to provide exposure to emerging markets while avoiding Chinese stocks [1][5] - Despite the appeal of these ex-China ETFs, performance has been mixed, with many underperforming compared to broader emerging market ETFs [6][7] ETF Performance and Trends - In 2024, there was significant demand for ex-China ETFs, with iShares MSCI Emerging Markets ex China ETF attracting $6.7 billion in inflows last year, but experiencing $5.4 billion in outflows this year [3] - The iShares Core MSCI Emerging Markets ETF has a 27% allocation to Chinese stocks, while ex-China ETFs like EMXC and VEXC offer lower exposure [4][5] - The Freedom 100 Emerging Markets ETF (FRDM) stands out with a 37.4% increase this year, focusing on countries with strong political and economic freedom, and excluding China [8] Fee Structures and Investor Strategies - Vanguard's VEXC charges a low fee of 0.07%, significantly lower than the 0.25% charged by iShares MSCI Emerging Markets ex China ETF [5] - Investors are using combinations of ETFs to manage their exposure to China, pairing broader emerging market ETFs with ex-China options for a balanced approach [5][6] - The article highlights the performance of various ex-China ETFs, with the Freedom 100 ETF outperforming others, while most lag behind broader emerging market indices [6][8][10]

Group 1 - The Schwab Emerging Markets Equity ETF (NYSEARCA: SCHE) closely tracks VWO and provides decent exposure to emerging markets [1] - Current geopolitical uncertainties lead to a cautious outlook on emerging markets as alpha generators [1] - The focus is on equity valuation, market trends, and portfolio optimization to uncover high-growth investment opportunities [1] Group 2 - The analyst has over 20 years of experience in quantitative research, financial modeling, and risk management [1] - Expertise includes fundamental and technical analysis, model validation, stress testing, and regulatory finance [1] - The research approach combines rigorous risk management with a long-term perspective on value creation [1]

Company Overview - AllianceBernstein Holding L.P. and AllianceBernstein L.P. are leading global investment management firms, with a focus on diversified investment services for institutional investors, individuals, and private wealth clients [4] - As of May 2025, AllianceBernstein had $803 billion in assets under management, showcasing its significant presence in the investment management industry [4] Product Launch - The company announced the launch of the AB Emerging Markets Opportunities ETF (EMOP), an actively managed ETF listed on the New York Stock Exchange, aimed at providing investors with access to emerging markets [1][2] - The ETF is designed to meet the growing demand for non-US equity exposures, particularly in emerging markets, reflecting the company's commitment to evolving client needs [2] Investment Strategy - EMOP aims for long-term capital growth by investing at least 80% of its net assets in equity securities of issuers economically tied to emerging markets [2] - The fund focuses on equity securities that offer compelling profitability prospects, reasonable valuations, and favorable fundamental and quantitative trends, leveraging the company's extensive experience in emerging markets [2][3] Expertise and Support - The dedicated Emerging Markets Equity team at AllianceBernstein combines fundamental research with quantitative tools, enhancing the fund's investment strategy [3] - The ETF is positioned as a strong option for model-builders and long-term investors seeking active management for their emerging market allocations [3]

Investment Rating - The report recommends an overweight (OW) position in emerging market (EM) foreign exchange (FX), an underweight (UW) in EM sovereign credit, and a market weight (MW) in EM local rates and corporates [5][14][25]. Core Insights - The US policy uncertainty continues to drive the EM outlook in the second half of 2025, with EM currencies expected to perform well in a slower growth, no-recession scenario [5][14]. - The projected global GDP drag from higher tariffs has been reduced following US-China détente, but remains significant, with global growth expected to slow to 1.3% annualized in H2 from 2.4% in H1 [29][30]. - EM monetary easing is ongoing despite a hold by the Federal Reserve, supported by domestic conditions and looser financial stability constraints [5][38]. Summary by Sections Executive Summary - The impact of US trade policy is expected to be more detrimental to the US than to EM, allowing EM local markets to continue performing well [14]. - The report suggests a neutral stance on EM fixed income assets, adjusting previous expectations of increased volatility and risk premia [14][22]. EM Local Markets Strategy - EM FX is positioned as OW, with a preference for currencies from EM Asia and Central and Eastern Europe (CEE) [5][25]. - Local bonds are rated MW, with a focus on short-end receivers in specific countries like Israel and South Korea [5][25]. EM Sovereign Credit Strategy - The report maintains an UW stance on the EMBIGD index due to asymmetric spread outcomes, favoring specific countries like Cote D'Ivoire and Romania while remaining cautious on Brazil and Serbia [5][25]. EM Corporate Strategy - The report holds a MW rating for EM corporates, noting steady fundamentals and technicals, but highlights historically low CEMBI spreads at 230 basis points [5][25].

Core Insights - Centene (CNC) is a significant player in the medical services market, particularly noted for managing the largest portfolio of Medicaid policies in the United States [1] Company Overview - Centene dominates the Medicaid market, indicating a strong position within the healthcare sector [1] Market Position - The company is often overlooked despite its substantial influence and market share in medical services [1]

Group 1 - The focus is on value companies linked to commodity production, particularly in sectors like oil & gas, metals, and mining [1] - Emphasis on companies with sustained free cash flows, low leverage, and sustainable debt, especially those in distress with high recovery potential [1] - Preference for analyzing companies in emerging markets that exhibit high margins and present good medium to long-term investment opportunities [1] Group 2 - Interest in companies with a strong pro-shareholder attitude, including solid buyback programs and consistent dividend distributions [1] - The analyst has a financial master's degree specializing in company valuation and an economic degree [1] - The motivation is to share information with the Seeking Alpha community to enhance individual investment decisions [1]