Help us make Portfolio123 truly global by adding Asian and Emerging Market countries. Your pledge goes towards future membership fees (see Special Terms below). Time to complete is approximately 4 months.
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Special Terms
For this project the amount your pledge will go towards your future membership renewal costs, up to 1/3 of the renewal totals, irrespective of the regions you subscribe to. For example if your membership renewal is $3,000, your renewal will reduced by $1,000 (1/3 of $3,000) until the pledge credit is depleted.
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If you look on this page FactSet Real Time Data you'll see the Asia Pacific exchanges, the Middle East and Africa exchanges, and the South American exchanges. This project proposes that all of these exchanges would be added. @marco Please confirm.
A lot of stocks in APAC, ~25k! I would need more API credits
I'm wondering what is earnings processing time for APAC for small/micro caps. How many stocks report semi-annually, etc. We know how it is in Europe.
Is it worth to pay for countries that outright forbid foreigners from trading stocks such as China or there is no option to choose? Unless expanding customer base to China is in the plans?
I forgot that, thank you for reminding. I'm most familiar with Thailand and I can share that foreigners are allowed to trade but there are additional rules and inconvenience.
The main limiting factor will be what exchanges your particular brokerage has access to, which will also take into account which countries have currency/capital control restrictions for outside investors.
I'll link Interactive Brokers below.
On a side note, South Korea recently passed some laws to open up their market to outside equity investors (IB only allows South Korea equity futures currently as they are reportedly ironing out out currency exchange issues with the controlled SK Won). I think countries like South Korea and Japan have recently found religion on how much wealth the US and Western Developed markets have built through their public equities markets and would like to emulate it. If you were looking for a completely naive market to run a sophisticated multi-factor systemic equity strategy in, similar to what the US was like 20-30 years ago, this would be it. Certainly unlikely that anything has been arbitraged away here.
For those who might not know about "APAC" and what this feature would be getting them - the short answer is Japan.
Japan is the big one. 5-6k stocks every year going back many years. That would be a big boost to P123's currently ?~16k? stocks in US and Europe.
Many of the other countries are rounding errors in comparison.
There are so many good companies that can be trusted in Japan and they can be very uncorrelated to US and European companies. Americans can easily access stocks in Japan through Interactive Brokers. The corporate culture in Japan is very different and 'what works' over there will be different than in the US and Europe, which is why it'd be great to validate your US strategies on only Japanese companies and vice versa.
India would be nice, but I haven't found a way to buy those companies as an American - they are all very expensive now as far as I understand. Likewise, South Korea would be nice as there are some cheap ones, though difficult to buy as an American. Hong Kong would be nice. Americans can buy those through Interactive Brokers - but it requires you to be comfortable with the ever present impending communist takeover by the Chinese emperor.
Japan has some great values and has for the last 8 years. We need the historical data though to have confidence in our decisions there. You can get a taste of Japan by looking through non-primary Japanese listings in US (already on P123).
If you are managing more than 1mm USD using P123 then a 2.5k contribution to this feature is a no brainer. See the latest GMO forecasts for long term returns in Japan based on valuations.
I would also add that in comparison to US market, some of Asian markets have very low valuations. Using one metric to make future prediction is obviously wrong, but take a look at shiller CAPE ratio. It is price of share divided by the average of ten years of earnings (moving average), adjusted for inflation.
Some examples of current CAPE valuations:
USA 31.4
Japan 20.9
South Korea 13.8
Australia 18.3
Fishing in the right pond is an important part of fishing. The CAPE is a good proxy for the "right" pond.
I think P123 should go ahead with this feature as it would really make them a global platform - How many Aussie or Japanese or Indian tinkerers might sign up for P123 if they could access their local market data as well as foreign US and European data for comparison?
I wonder if adding European data a few years ago helped with some European sign ups. Hopefully it did.
Ultimately, when P123 customers do well with their investments, P123 does well. So, enabling P123 customers to have 5-20% of their money in Japan or other cheap APAC countries by giving them the data they need to make those decisions should redound to P123's benefit.
As most of the suggested markets have separate currencies and some could be quite volatile, I wondered if it would make sense to add the setup of a FX hedging option to this project. Not only would that be of value for the suggested markets, it would also help with existing strategies that are e.g. in base ccy EUR but hold CHF assets to a significant part.
For US investors, I think we're see that international diversification is starting to payoff. My Euro small/microcaps are way overperforming my US microcaps this year. , Eurozone inflation numbers are looking better than the US and ECB is probably going to start doing rate cuts before the Fed. If these conditions sustain, there are going to be absolutely massive flows and repositioning after the last 15 years of US market outperformance. Would be nice to have multi-region diversification.
Well said. My European strategies are also outperforming my US ones this year so far.
I’d be willing to increase my pledge for Asian/emerging markets if I knew that it also included linked IBKR trading to make it easier to trade an expanded set of strategies.
I’m excited by many of these sponsored projects, and have pledged to several, but I’m worried about them stagnating after an initial flurry of pledges.
