Emerging Market Currencies

MacroVar offers 300+ Investment Strategies with higher returns, lower risk and losses than the Emerging Market Currencies Strategy

However, market risk indicators must be implemented to monitor and close investments early in these countries since they exhibit higher risks than developed markets.

Emerging markets dangers include political risks, economic inequality, unpredictable events like nationalization of industries and external debt defaults.

Value Investing in emerging markets includes analysis of fundamental and macroeconomic data. The most important macroeconomic indicators are country’s GDP Growth, inflation, debt levels, interest rates and balance of payments.

Each month an investor ranks 10 Emerging Markets countries into 3 lists according to GDP growth, Inflation and shor-term interest rates. The Investor buys and holds these currencies against US Dollar for the top 5 ranked countries by joint macroeconomic signal through 1-month Forward contracts. Each Currency has an equal dollar amount invested at beginning of the month.

CDS Spreads for all countries are monitored to check country risk. If any of these countries CDS spreads has risen mor ethan 20% over past month, the investor doesn’t invest in this currency for the upcoming month. The capital is reallocated to the remaining currencies. If none of the currencies passes the CDS market risk filter, portfolio capital is invested in the US money markets for the follogin month.