Life Beyond the US & Eurozone (1/3)
A Look at the Next Eleven, Frontier Markets, & Tau Index Leaders
By: Roger Strukhoff
Dec. 16, 2011 06:00 AM
(This is Part 1 of a three-part story. Part 2. Part 3.)
The so-called BRICS (Brazil, Russia, India, China, and South Africa) have offered opportunities in natural resources, infrastructure, and consumer markets in recent years, but these markets are hardly a secret anymore. Many people and companies today are searching "beyond the BRICS."
N11 & Frontier Markets
N11 countries must have sufficient population and potential economic heft to merit the notion of entering the world's largest economies. They are in widely divergent stages of development.
Clearly, investing in many of these countries is not for the squeamish, and investing in Iran is, of course, illegal for American companies and individuals.
The database is now owned by Standard & Poor's, which publishes an index of key companies in these markets; competing indices have sprung up as well.
Frontier Markets can remind one of the admonition about Russia shortly after the fall of the Soviet Union: "if you have $100,000 to invest, invest it in Russia. If you have $1 million to invest, invest $100,000 in Russia."
N11 and Frontier-Market investors are seeking high returns, to be sure, but over a long term. An expectation of short-term volatility (even catastrophe) is built-in. But over a term of say, one or two decades, investments in Frontier Markets are expected to grow much more rapidly than a similar bet in a highly developed, stable, conservative environment.
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