Great Time to Buy, Specialist Emerging Market Fund Cartica Says

(Bloomberg) -- Forget turmoil in Turkey and angst in Argentina, emerging market specialist Teresa Barger says it’s a “great time” to invest.

“It’s one of those rare moments where the fundamentals are quite good and the sentiment is very bad,” Barger, who heads the $2.8 billion Cartica Management LLC long-only fund, said in an interview at the Milken Institute Asia Summit in Singapore. While the stage was set for a bull market, “it got interrupted by all of the political and policy noise” from countries such as Argentina, Turkey and Venezuela, which are not “systemically important,” she said.

Emerging markets are out of favor among investors this year amid concerns ranging from tighter U.S. monetary policy to Argentina’s fiscal woes and political and market upheaval in Turkey. The MSCI Emerging Markets Index has slumped about 20 percent since January, outpacing a 4 percent fall in the MSCI World Index, and the MSCI Emerging Markets Currency Index has declined about 6 percent this year, set for its first annual loss in three years.

Barger said she is particularly optimistic about India, because many companies are showing strong earnings growth. Investors can focus on market leaders as companies are forced to start paying taxes, a minimum wage and employee health care, rendering many firms uncompetitive.

One beneficiary is underwear manufacturer Page Industries Ltd., whose shares have surged 33 percent this year. “Sixty percent of their competitors are informal manufacturers. We believe that much of that competition is going to just crumble or wither away,” Barger said.

Washington-based Cartica invests only in emerging markets and managed $2.8 billion in assets as of June, according to the firm’s website. It had 32 percent of funds allocated to India, 14 percent to Brazil, 13 percent to the Philippines and 12 percent to Mexico. The 10 biggest holdings account for about two-third of the fund’s assets. Barger declined to disclose returns.

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