Emerging markets currencies - extremely hot

Developing countries' currencies are the big winners this year. The Mexican Peso, for example, is the most growing currency since the beginning of the year, marking its strongest growth for over four years.
The emerging currencies reported their best start of a year, which happened only three times this century, and the good times ahead could still be ahead, according to analysts.
Twenty of the 24 currencies of emerging economies have seen a rise since the beginning of the year, driven by a more than 8 per cent appreciation of the Mexican peso and the Polish zloty. Of the four currencies that have declined since the beginning of the year, none have lost more than 1% of their value.
The average growth of a developing countries' currencies since the beginning of the year was at 4.7% or the best performance since 2006. Low financial asset ratings, coupled with returning investors to these markets, could trigger further currency growth, experts say.
Analysts at the Templeton Global Bond Fund are particularly positive about the currencies of India, Mexico and Brazil.
Earlier this year's results for emerging currencies compete with those of 2003, 2006 and 2011.
A key factor in the future performance of developing countries' currencies will be the trajectory of the dollar and whether the Fed will be willing to raise interest rates two or more times by the end of the year.

J. Gundlach: Replace US with Emerging Markets

After the strong rise in US indices since November, taking them to new record highs, legendary investor Jeffrey Gundlach, head of the DoubleLine Capital Fund, has a tip to investors. And he is - to replace their US investments with those of the emerging markets.
Referring to US stocks, which, according to Gundlach, account for about 50 percent of world stock exchange capitalization, compared to a share of only 24 percent of global GDP, Gundlach believes US state ratings are "staggered".
For this reason, the expert offers investors to shorten the SPY index fund based on the broad  S&P 500 index and to extend the EEM, an emerging market indexed fund.
Ghundlach is not the only one with such recommendations. A survey of Bank of America Merrill Lynch in April shows that investors are leaving US markets at the fastest pace in a few decades. They prefer the markets in the eurozone and the Asian countries.
In addition, more than 44% of institutional investors like the emerging markets, which is the highest percentage in five years.
Also 83% of respondents, from the US bank, find the US market to be overvalued.
A series of factors contributed to these expectations, including the double-digit growth of US indices since the US presidential election in November.