Developing markets lead in long-term growth potential
- Jim Rothenberg
- Portfolio manager
- Based in:
- Los Angeles
- Investment experience:
KEVIN CLIFFORD: You touched on developing markets — and, again, in past sessions you have had a sense that developing markets would lead the world out of this economic malaise. How are you thinking about that these days?
JIM ROTHENBERG: I still think, if you take a 10-year time frame, that the population demographics in emerging countries are just powerful. The population demographics in Europe and Japan, in the United States, are nowhere near as attractive. Simply put, if you look at the United States, we’re more or less replacing the population. If you look at Europe, they’re not replacing the population. Japan is not replacing the population, and Russia’s not replacing the population. So those parts of the world are going to have — in a long-term-growth sense — they’re going to have some challenges.
Whereas the developing countries, even with population growth in many of them coming down, it’s still much more attractive than in the U.S. They have much bigger potential labor forces, and inherently they can grow faster. And so I think, over a 10-year time frame, everyone should have a realistic exposure to emerging countries and markets.
But you don’t have to do it by buying a Chinese company. You can do it by buying a company —whether it’s based in Europe, based in the U.S. or even a Japanese company — that has global scope and has a lot of participation in emerging countries. And as well, you can go into those countries and look for unique opportunities.
So I still feel very strongly about it. And the advantage I have now is those markets have not done as well in the last 24 months as many of the big Western markets, and so I think there’s a lot more attractive opportunity there now.
- Growth outlook mixed across the globe
- Energy, housing infrastructure ripe areas for investing
- Europe, despite woes, still a source of opportunities
- Developing markets lead in long-term growth potential
- Stock selection has made the difference in Growth Fund
- Active, diversified investing still a sound approach