"Emerging Market Fund of the Year" ACQ5 Awards '15


From Pariah To Powerhouse: The Iran Nuclear Deal And The New Land Of Opportunity

There is no shortage of opinions surrounding the recent deal struck between the P5+1 nations and Iran. It has been labeled as “absolutely horrible” by everyone’s favorite business magnate turned 2016 presidential hopeful, Donald Trump, a sentiment that seems to be more or less shared by the rest of the Republican field. On the other end of the spectrum, President Barack Obama and his supporters have heralded the deal as historic and a resolution to “the most consequential foreign policy debate that [The United States] has had since the invasion of Iraq.” While the paramaters of the deal are certainly quite polarizing depending where you fall on the political spectrum, one thing is clear, the sudden inclusion of a country with a population of 80 million (60% of whom are under the age of 30) and a $400 billion economy into the international financial marketplace holds dramatic implications for investors and corporations across the globe.

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Bargain hunting in the Chinese stock rubble

China's stock market is a mess right now. But does that mean that investors should avoid all Chinese stocks? No.

There are hundreds of companies that are headquartered in China but trade on exchanges in the United States.

Several Chinese blue chips are now trading at bargain prices simply because they are based in China.

Peter Pham, managing director of the Asia-oriented asset management firm Phoenix Capital, said that the current bear market in China "could create opportunities for [foreign investors] to increase their position if they remain bullish in the long term about China's economic prospects."

Shares of China Mobile have fallen nearly 10% in just the past month, for example. That's actually not that bad considering that the Shanghai Composite is down about 25%.

Pham recommends another ETF that shuns stocks in favor of bonds. The PowerShares Chinese Yuan Dim Sum Bond (DSUM) ETF invests in debt that is denominated in China's yuan (or Renminbi) currency. But the debt is issued outside of China.

"The Dim Sum ETF seems to be the best way to go. It's multinational debt in yuan for the long term," Pham said.

In other words, investors get exposure to China with a little more stability. This ETF is down just 1% over the past month and is still up for the year.