As the man who invented emerging markets funds back when this newsletter started has decided that growth has moved back to the developed world, mostly to the USA, I will stick to my guns. Antoine Van Agtmael, then with private sector arm of the World Bank, the International Finance Corp., sponsor of the first specialized "less developed countries fund", in ~1982 coined the term "emerging markets".

 The first EM funds came from Morgan Stanley and invested in stocks. Now according to John Arthers in the weekend Financial Times, Mr. Van Agtmael thinks the USA is now more competitive than the Third World. Van Agtmael cites "creative response" like robotics, 3D printing and other manufacturing breakthroughs as moving production back to the West. He calls this the growth of the "Brain Belt' in place of the "Rust Belt". That mostly is about the US industrial heartland.

 Frankly, I am not convinced. We do not recommend positions in the USA, where most of the creativity is allegedly taking place. But I doubt that the time to switch has come. And while the world has been treated to the spectacle of political risk (in Ukraine, Thailand, and now Vietnam) I am sufficiently wary of political risk in the USA to not put all my money in the country run from Washington DC, where Mr. Van Agtmael hangs out.

 I suspect Mr. Van Agtmael is fed up with slicing and dicing of EMFs into BRICS and CIVETS etc. This is not only macro-economic forecasting but rigor.

 Emerging markets are coming into play. I will be running articles about some funds from exotic places (ranging from Chinese to Mongolian and from Russian to Mexican real estate) in the coming week. Apart from the zeal of my team to find good ideas, there is a reason for emerging market property to be back in the spotlight. As the  feared US Treasury bond rate increases fail to show up on time, interest investors are back into playing the emerging markets for sustenance

 There fund instruments are ones we like for the simple reason that we are not able to buy a diversified commercial real estate portfolio in faraway lands on our own. Thus we own Global Logistics (GBTZF in Singapore which apart from China also invests in needy Japan and fast-growing Brazil);  Mongolia Growth (MNGGF here; YAK in Canada); Raven Russia (RUS in London) and Fibra Uno in Mexico (FBASF in Los Estados Unidos.) We also are invested long-term directly in Brazilian transport and ports through Cosan, CZZ.  Articles about these ideas are in the pipeline

 This week should also see a break-out of another fund in our portfolio a la Modi.  That is Ascendas India Fund,  ACNDF, also Singaporean. It will probably go up on the election outcome as India becomes more investable than under the Nehruvian dynasty. Franky as a secularist I am more upset by the lack of criticism of the practitioner of aggressive Hindutva than by the US Supremes allowing prayers at upstate NY town meetings.

 By the way, I doubt if the new Indian government will remove the impediments to locals indulging in their favorite sport after cricket, buying gold, by cutting the duty on the yellow metal. Having won the election, there is no need for more Modi populism. Instead, the disincentives will remain leading to a further boost to the Indian stock market and maybe further spending in malls owned by ACNDF.

 Since our old India small-cap closed-end fund delisted, I will be looking into recommending India Fund (IFN) at the usual CEF discount, 9%, after examining its portfolio in more detail this week.  I am not sure if it will fly.

 I will not add more gold, GLD. Owning gold in India is not pro-business but archaic.

 I have good news and bad on yield plays overall. The good news is that our yield portfolios, notably our heavily overweight inRoyal Bank of Scotland preferred shares and my Down Under play, Aberdeen Asia Pacific Fund (FAX) are doing very well. The bad news is that both are producing a lowered yield as their prices rise. That means they are not as good a deal for new subscribers who missed our early calls on these ideas. The Oz dollar is up which explains FAX.

 The sale of Citizen's Bank in the USA will produce money for RBS but will not buy back its preferred shares, because first on the pay queue is Her Majesty's Government which owns nearly 82% of RBS after the bail-out.