Since the stock market’s gate opened at the beginning of 2012, emerging countries were off to a fast start. Stocks in Brazil, Colombia and India galloped to the lead, increasing more than 10% within the first few weeks of the year.
By the time the end of April came around, Colombiahad sprinted to the lead, followed closely by Thailandand the Philippines. All increased more than 20% in the first four months of 2012.
However, rather than focusing on the leaders of the pack, spectators seemed to have directed their attention toward the S&P 500 Index, as it galloped to its best first-quarter gain since 1998.
The recovery inU.S.stocks is significant and helps restore confidence in equities. We’re pleased to see markets improving, especially following a rough finish in 2011. Yet there lingers a persistent negativity toward emerging markets growth and commodities that prevents many investors from jockeying their portfolios into a position for growth. Rather, they remain spectators on the sidelines, with equity fund outflows continuing.
In contrast, Eastern Europe exploded on the upside and far outpaced not only the US market, but also Europe. The chart below shows investment results across three different markets. Since the beginning of the year through April 30, the iShares S&P Europe 350 ETF has trailed, while the SPDR S&P 500 ETF has placed second. Among these three investments, the Eastern European Fund (EUROX) has kept the lead for most of the quarter and took first place as of April 30.
You can see above that Eurox and the European market were climbing steadily since the beginning of the year, but By April, began to fall because of the euro zone’s debt grief and concerns over China.