34 BARRON’S July22,2019
investment choices, emphasizing sover-
eign bonds. Such legwork is critical
because they often make bets outside
their funds’ benchmark indexes, which
can bolster relative returns.
“The index isn’t always where the
opportunities are,” says Stein. For ex-
ample, the pair has minimal exposure to
South African debt—a major emerging
market economy—because of that na-
tion’s worsening budget situation, youth
unemployment crisis, and government
corruption.
The two are “early movers,” says
Benjamin Joseph, a Morningstar ana-
lyst. “When you can take an early posi-
tion and when you know what you’re
doing, you can deliver a first-mover
advantage.”
Cirami covers emerging markets,
while Stein covers Asia and Western
Europe. They met as analysts on a tiny
global income team at Eaton Vance in
the early 2000s. Today, they oversee
around 50 people.
“The nice thing about emerging
markets debt is if you do your home-
work and get your analysis correct, you
can avoid the downside and capture
some nice upside in more positive, re-
form-oriented countries,” says Cirami.
The two remain bullish on emerging
Eaton Vance
Emerging Markets
Debt Opportunities
Note: Holdings as of 5/31. Returns through 6/30, three- and five-
year returns are annualized. Source: Eaton Vance
Total Return
1-Yr 3-Yr 5-Yr
EADOX 6.4% 6.0% 3.61%
JPM GBI-EM
Global Diversified
9.0 4.2 -0.5
Top 10 Countries for
Debt Holdings
% of Assets
Egypt 12.3
Nigeria 11.1
Ukraine 9.9
Serbia 8.7
Peru 7.0
Bahrain 5.7
Sri Lanka 3.7
Argentina 3.5
Indonesia 3.6
Thailand 3.4
Total 25.6
markets, as much as it goes against
their constitution. “I spent my life be-
ing bearish,” says Cirami, “which
serves emerging markets debt inves-
tors quite well.”
Ten years ago, Cirami was visiting
Serbia, which has had a history of vio-
lent conflict between nationalists and
those oriented toward the European
Union. But a visit with a political ana-
lyst gleaned a critical insight. “The local
population was exhausted from conflict,
and as a result, the political spectrum
was narrowing,” Cirami recalls. That
made foreign and economic policy eas-
ier to predict. Today, Serbia is near the
tail-end of a decadelong reform story—
it liberalized its business environment,
massively reduced budget deficits, and
balanced its budget with IMF support.
While yields have fallen dramatically
across the globe, Serbia remains attrac-
tive to the duo. It recently issued
seven-year local bonds at 3.59%. Com-
parable bonds were yielding 2.28% in
Poland and 1.48% in the Czech Repub-
lic. Serbia accounts for around 9% of
the Emerging Markets Debt Opportu-
nities fund and is also held in the Eaton
Vance Emerging Markets Local Income
fund (EEIAX).
Two years ago, the pair finally wa-
gered on Egypt, which “went from cri-
sis to vulnerable,” Cirami says. “That’s
an interesting move for an emerging
markets story, and usually some nice
returns come along with that.” After
the 2016 currency devaluation, the gov-
ernment reduced the budget, privatized
assets, and improved business condi-
tions. Interest rates on Egyptian Trea-
sury bills—the top holding in Emerging
Markets Debt Opportunities—are 15%.
The fund’s newest position is
Ukraine, whose debt Cirami and Stein
started buying last year. They were
early believers that Volodymyr Zel-
ensky, the onetime comedian elected
president this year, will be able to re-
duce corruption and speed economic
reforms, making Ukraine hospitable to
foreign capital and setting the stage for
faster growth.
Over the past few weeks, five- to
10-year Ukraine bonds denominated in
U.S. dollars have seen yields some five
to six percentage points higher than
those of comparable U.S. Treasuries.
It’s a classic emerging markets turn-
around story, says Cirami. For share-
holders, it would be another example
of the duo’s ability to find opportuni-
ties, often ahead of others.
Scoreboard: GoodasGold
(Fundsinvestingingold,silver,andotherpreciousmetalscontinuedtorally,rising6.72%fortheweek,
and30.44%fortheyear.U.S.stockfundstreadedwater,whilenaturalresourceslost3.7%.
OneWeek Year-to-Date
U.S.STOCKFUNDS 0% 18.90%
TOPSECTOR/PreciousMetalsEquityFunds 6.72 30.44
BOTTOMSECTOR/NaturalResourcesFunds – 3.71 7.38
S&P500 – 0.16 19.48
U.S.BONDFUNDS 0.27 6.09
BloombergBarclaysAGGBond 0.48 5.43
THEWEEK'STOP25
Fund InvestmentObjective OneWeek Year-to-Date
USGlblGold&PM/USERX PreciousMetalsEq 9.80% 33.7%
USGlblWorldPM/UNWPX PreciousMetalsEq 9.34 17.0
EuroPacGoldA/EPGFX PreciousMetalsEq 9.26 28.0
RydexPreciousMetlsInv/RYPMX PreciousMetalsEq 8.99 32.5
VanEckIntlGoldI/INIIX PreciousMetalsEq 7.67 34.3
MidasFund/MIDSX PreciousMetalsEq 7.63 30.6
OCMGoldInv/OCMGX PreciousMetalsEq 7.43 36.0
TocquevilleGoldFund/TGLDX PreciousMetalsEq 7.42 27.6
USAAPrecMet&MinFund/USAGX PreciousMetalsEq 7.25 33.3
InvscOppenGld&SMA/OPGSX PreciousMetalsEq 6.95 35.4
AmerCentGlGoldInv/BGEIX PreciousMetalsEq 6.85 31.0
GabelliGoldAAA/GOLDX PreciousMetalsEq 6.69 32.2
FranklinGld&PrMtA/FKRCX PreciousMetalsEq 6.30 34.0
WellsFargoPrecMetA/EKWAX PreciousMetalsEq 6.29 33.3
FidelitySelGold/FSAGX PreciousMetalsEq 6.05 28.9
FirstEagleGoldI/FEGIX PreciousMetalsEq 5.27 27.2
InvescoGold&PrecA/IGDAX PreciousMetalsEq 5.04 26.4
RydexElectronicsInv/RYSIX Science&Tech 3.24 32.3
FidelitySelSemicnd/FSELX Science&Tech 3.16 32.8
FidelityAdvSemicndA/FELAX Science&Tech 3.15 32.5
AQRMgdFutStrHVI/QMHIX AltMgdFutures 3.08 6.9
AltegrisGSATrendStrN/TRNNX AltMulti-Strategy 3.01 0.7
GoldBullionStratInv/QGLDX PreciousMetalsEq 2.78 12.5
EventideHlthcare&LSI/ETIHX Health/Biotech 2.62 35.1
TowleDeepValue/TDVFX Small-CapValue 2.49 9.7
THEWEEK'SBOTTOM10
Fund InvestmentObjective OneWeek Year-to-Date
VictoryGlNatResY/RSNYX GLNaturalResourc – 9.29% – 27.1%
RydexEnergySvcsInv/RYVIX NaturalResources – 7.49 1.6
FidelitySelEnrgySer/FSESX NaturalResources – 7.12 – 0.6
FidelitySelNatGas/FSNGX NaturalResources – 5.97 5.3
IvyEnergyI/IVEIX NaturalResources – 5.52 3.4
InvscOppenSPPanoA/EESAX EnergyMLPFunds – 4.98 6.3
UprightGrowthFund/UPUPX GlobalMulti-CapValue – 4.92 – 5.1
InvescoEnergyA/IENAX NaturalResources – 4.87 4.5
GoldmanCommStrI/GCCIX CommoditiesGeneral – 4.75 9.8
Matthew25Fund/MXXVX Multi-CapCore – 4.57 25.3
THELARGEST25
Assets 3-Year* 1-Week YTD
Fund (billions) InvestmentObjective Return Return Return
FidelityContrafund/FCNTX $95.5 Large-CapGrowth 17.4% – 0.59% 23.7%
AmericanFundsGroA/AGTHX 89.9 Large-CapGrowth 15.1 – 0.74 19.4
VanguardWellingtonAdm/VWENX 88.7 MixTgtAllGro 9.4 0.25 14.2
AmericanFundsIncA/AMECX 73.6 MixTgtAllMod 6.8 0.40 11.7
AmericanFundsBalA/ABALX 70.9 MixTgtAllGro 8.7 0.22 12.4
AmericanFundsEuPcR6/RERGX 70.9 IntlLarge-CapGrowth 10.0 0.77 19.4
Dodge&CoxStock/DODGX 70.8 Large-CapValue 13.3 – 0.02 14.5
PIMCOIncomeInst/PIMIX 67.2 Multi-SectorInc 6.0 0.02 5.8
AmericanFundsCIBA/CAIBX 65.1 GlobalEquityIncome 5.1 0.42 11.3
AmericanFundsICAA/AIVSX 60.9 Large-CapCore 10.3 0.03 15.7
Dodge&CoxIncome/DODIX 59.6 CoreBond 3.5 0.36 6.8
AmericanFundsWashA/AWSHX 59.3 Large-CapCore 12.6 – 0.09 16.5
VanguardPRIMECAPAdm/VPMAX 58.0 Large-CapCore 16.6 0.80 15.3
AmericanFundsFInvA/ANCFX 53.0 Large-CapCore 12.4 0.25 17.1
AmericanFundsCWGIA/CWGIX 52.2 GlobalLarge-CapCore 9.9 0.14 17.0
PIMCOTotRtnInst/PTTRX 50.6 CorePlusBond 3.1 0.65 6.3
Dodge&CoxIntlStock/DODFX 49.9 IntlLarge-CapCore 7.5 – 0.60 12.6
DoubleLineTotRtnI/DBLTX 45.8 USMortgage 2.9 0.47 4.5
VanguardTgtRet2025Inv/VTTVX 43.6 Mixed-AssetTarget2025 8.2 0.26 13.4
AmericanFundsNPerA/ANWPX 43.3 GlobalLarge-CapGrowth 13.7 0.31 20.7
VanguardWellesleyAdm/VWIAX 43.2 MixTgtAllocCon 5.9 0.45 11.4
MetWestTotalReturnI/MWTIX 42.8 CorePlusBond 2.6 0.51 6.5
VanguardSh-TmInvAdm/VFSUX 42.0 ShortInvGrade 2.3 0.24 4.3
TRowePriceBCGro/TRBCX 42.0 Large-CapGrowth 21.3 – 0.08 24.6
FidelityStrAdvCreInc/FPCIX 41.3 GeneralBond 3.1 0.50 6.7
*Annualized07/14/2016to07/18/2019.ThroughThursday. Source:Lipper