By Carl Delfeld of Chartwell ETF & Emerging Markets Alpha
After South Africa (EZA) and South Korea (EWY) fell through their 50 day moving averages on Monday, the Emerging Markets Balanced Portfolio zeroed out its weightings to South Africa (EZA), South Korea (EWY) which followed its previous moves in dropping India (INP) and Taiwan (EWT) due to high valuations. In addition, the cash weighting was increased to 16% and a 10% allocation was made to the emerging market inverse ETF (EUM).
Today, the emerging market ETF (EEM, VWO) fell through its 50 day moving average as the emerging market selloff accelerated. The portfolio's allocation to emerging market bonds and currencies was maintained at 15%.
The goal of Emerging Markets Alpha is to help investors avoid the roller coaster of emerging markets investing by taking a balanced approach using a valuation led, momentum check model.
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