According to a recent Edgar filing , PIMCO will soon be launching a new fund: PIMCO Global Opportunities Fund .

It’s going to be a global value fund of common and preferred stock. The fund will target equities in one of 3 countries, one of which may be the U.S..

Criteria used for determining whether a stock is undervalued by the market include: asset value, book value and cash flow and earnings estimates.

The Fund considers large and mid cap companies to have a market capitalization greater than $1.5 billion, but the fund is not limited by size and may invest without limitation in securities that are economically tied to foreign countries as well as emerging market countries.

The fund is also not limited solely to stocks and may also invest in U.S. and foreign government debt and other debt securities like bank loans. PIMCO selects such securities on the basis of value and not just rate or rating. This leaves the management team open to high yield bonds (A.K.A. Junk Bonds) and any rating.

As you can see, this is a pretty unlimited fund, and not strictly adhering to any one market cap, investing style or security type but it could make for a good core holding. The folks at PIMCO have a good name, and their bond team are among some of the few to have not only called the mortgage meltdown successfully, but also positioned their funds to take advantage at just the right time.

Since the fund can invest in both equities and debt securities in foreign countries, this opens them up to being susceptible to equity risk, currency risk, leverage risk and pretty much any other kind of risk when investing in anything other than CDs.

PIMCO has not yet named portfolio managers for the fund.

If you’re interested in this fund, feel free to read the whole Edgar filing – it’s informative, but not easily digested for beginners. Still, it’s worth a read if only to acquaint yourself with the kinds of data found in a Form N-1A SEC filing.

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Many investors take the change in calendar year as an opportunity to assess their portfolios and the future, and hopefully get their portfolios aligned with the future direction of the stock market. One way in which to do this is to look back on the year that’s passed and see what worked and what didn’t, then ponder whether those trends will continue for the new year, or fizzle out.

Morningstar has a great article on what was hot in 2009, and why.

For starters, what was hot:

4 general categories proved to spear head the market out of panic mode:

• Emerging markets
• Small cap stocks
• Commodities
• Technology

The hottest single category for the year of all Morningstar categories and asset classes was Latin America stock funds – up 112% for the year. Diversified emerging markets rose 72%, while Pacific/Asia ex-Japan funds were up 69%.

Morningstar attributes these numbers to two factors:

1. A general sense of relief when investors realized the panic of Q4 2008 – Q1 2009 was overblown and the global financial system wasn’t headed over the abyss. This led investors to dive back into more “adventurous” investments that they had previously fled.
2. China’s economy showed signs of being more resilient than other economies, leading investors to return to embracing the trend of Chinese growth potential.

One could also argue, though the Morningstar article doesn’t, that the interest in commodities was due to an overall trend of uncertainty about the future caused in large part by un restrained government spending and historic federal deficits. Many people are hedging toward protecting for a possible currency crisis or at the very least, rapid rise in inflation.

Small cap and Tech stocks were hot because those kinds of stocks typically lead an economic recovery, so investors were looking to catch any stock market recovery in the early stages.

Check out the Morningstar article to see more of their reasoning behind the numbers.

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American consumers are spending less, and this presents a big hurdle for American retail stocks. But investors can still cash in on emerging markets over the next couple decades.

Big spenders.

The emergence of the middle class in so called BRIC countries (Brazil, Russia, India and China) is the most important demographic change of the 21st century.

According to McKinsey & Co.,
urban consumers in China will spend $2.3 trillion per year by 2025. And India – the world’s second most populous country – will grow from 5% of the world’s population to 40% over the next two decades.

If you’re looking to dabble in the emerging market retail sector and capture some of this unprecedented growth, here are 3 stock recommendations courtesy of SmartMoney.

3 Emerging Markets Retail Stock Picks

AVON (AVP).
With a market value of $12.2 billion, AVON is the world’s biggest direct seller of beauty products to women in over 100 countries. AVON derives more than 56% of its income from BRIC countries, with revenue growth of 24% in Brazil alone in 2008. The stock trades at 16 times its 2010 P/E, well below the 5 year average of 20.

American Movil (AMX).
Based in Mexico city, American Movil is Latin America’s largest mobile phone provider. The company has a $67 billion market cap and added 3.9 million subscribers Q1 of 2009. Besides being the dominant player in Mexico, American Movil is the 3rd largest provider in Brazil, with plenty of room to grow.

Shanda Interactive Entertainment (SNDA).
Shanda Interactive Entertainment offers online gaming to the Chinese populace. The number of Chinese Internet users has passed that of the U.S., and the companies profits increased 25% in Q1.

Risk.

While the above stocks and markets offer the opportunity for tremendous growth, there is a risk. Perhaps the biggest risk when investing in the BRIC countries, as with any emerging market, is the lack of transparency. For example, much analysis of China revolves around it’s impressive GDP growth of around 8% at a time when other countries are seeing negative growth. Part of China’s impressive apparent growth comes from the fact that the government includes stimulus spending by the government! This leads to an over inflated estimate and lack of any clear idea of what the real GDP may be.

photo by ** Maurice **

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ETFs.

• The ETF DataBase has a great post detailing the history of the ETF industry by way of 25 people who helped create it. Read The ETF Hall of Fame: 25 People Who Revolutionized the ETF Industry

• 76 ETFs For Foreign Stock Exposure from Bradley Johnson’s Personal Finance And Investing blog is an exhaustive listing of foreign ETFs broken down by single country, Region and more!

Investing Tips and Techniques.

• Trend Technician has a great post about why you shouldn’t Trade Without a “Stop”.

• The Amateur Financier provides a wonderful breakdown of Risk Management Strategies.

• Wise Money Matters gives a quick and handy breakdown of various types of stocks (not growth, value or large cap, small cap either) in What are the different types of stocks?

Warnings and Reminders.

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• AllFinancialMatters reminds us (graphically) that Not All S&P 500 Index Mutual Funds Are Created Equal!

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When bear markets rally, it’s often the small caps and technology stocks that lead the way. Here are 3 ETFs that may help you make the most of the current rally.

iShares MSCI Emerging Markets ETF (EEM ).

The EEM is comprised of 329 stocks from countries that have yet to mature economically. This translates into high potential for growth. The holdings are focused primarily in South Korea, China, Brazil, Taiwan, Russia, South Africa, and Mexico. EEM has gained 29.58% year to date and carries a yield of 1.8% with an expense ratio of 0.72%. But a word of caution: while emerging markets are capable of incredible growth, they can turn on a dime and deliver punishing losses – EEM lost 50% in 2008.

Direxion Daily Small Cap Bull 3x Shares (TNA)

As the name suggests, the Direxion Daily Small Cap Bull aims to triple the performance of its index, in this case the Russell 2000. It uses leverage to accomplish this, so it should be treated as a real live wire. The Russell 2000 follows small cap stocks between $250 million and $3 billion. This is where high growth is often seen earliest.

Because this ETF uses leverage, it is not for the passive or buy-and-hold investor. Rather, it is best for short term speculators who can handle the occasional big loss. TNA is down 9.52% for the past 3 months, but up 35% YTD. It’s expense ratio is 0.95%.

Technology Select Sector SPDR (XLK)

The Technology Select Sector SPDR is one of the largest tech ETFs going. It has $2.8 billion in assets, and tracks tech stocks in the S&P 500. Good performance from Apple and Intel have pulled the tech sector higher despite poor performance from other stocks in the index. Microsoft, AT&T and IBM make up the top 3 holdings (out of 79 total).

XLK is up 27% YTD and has a yield of 1.59%, though it was down 41.39% for 2008. It sports an expense ratio of only 0.21%.

It’s hard to tell if this has been a sucker’s rally that’s about to end, or a natural rebound to fair market values (evidence exists to support both sides), but these ETFs should provide you with good diversification and an excellent chance to catch the return to economic growth when it happens.

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