{"id":28300,"date":"2012-03-16T10:13:49","date_gmt":"2012-03-16T14:13:49","guid":{"rendered":"http:\/\/countingpips.com\/fx\/2012\/03\/16\/investing-in-asias-frontier-markets\/"},"modified":"2012-03-16T10:13:49","modified_gmt":"2012-03-16T14:13:49","slug":"investing-in-asias-frontier-markets","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2012\/03\/16\/investing-in-asias-frontier-markets\/","title":{"rendered":"Investing in Asia\u2019s Frontier Markets"},"content":{"rendered":"<div align=\"left\"><script type=\"text\/javascript\">\ntweetmeme_style = 'compact';\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\"><\/script>\n<\/div>\n<div><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-28233 \" title=\"Investing in Asia's Frontier Markets\" src=\"http:\/\/www.investmentu.com\/wp-content\/uploads\/2012\/03\/investing-in-asia-frontier-markets.jpg\" alt=\"Investing in Asia's Frontier Markets\" width=\"220\" height=\"220\" \/><\/p>\n<p>China&#39;s economy has grown by over 1000% since 1990. For similar growth opportunities, look no farther than Asia&#39;s frontier markets.<\/p>\n<\/div>\n<p>You may be reading quite a bit about China\u2019s property bubble, higher manufacturing costs, slowing economic growth and its attempt to shift gears to a consumer-led economy.<\/p>\n<p>What\u2019s next for China is debatable, but there\u2019s no question that it\u2019s achieved tremendous progress in a short time.<\/p>\n<p>For some perspective, China\u2019s exports for the entire year of 1980 are <em>equal to one day of exports in 2012! <\/em>China\u2019s economy of 1990 was equal to that of Taiwan \u2013 <em>now it\u2019s 12 times larger. <\/em>At least 200 million Chinese have been pulled out of poverty.<\/p>\n<p>You are probably thinking, \u201cIf only I could go back in time and <a title=\"Investing in China\u2019s Rising \u201cSocial Safety Net\u201d\" href=\"http:\/\/www.investmentu.com\/2011\/January\/chinas-rising-social-safety-net.html\">invest in the China<\/a> of 1980 or 1990.\u201d<\/p>\n<p>You can.<\/p>\n<p>Just go to Asia\u2019s new frontier of growth\u2026<\/p>\n<h2><strong>Asia\u2019s New Frontier<\/strong><\/h2>\n<p>These are countries that are 10 to 20 years behind China, such as Vietnam, Sri Lanka, Philippines, Indonesia, Cambodia, resource rich Mongolia and Papua New Guinea, and even Myanmar\/Burma (more on this later).<\/p>\n<p>Here\u2019s a quick overview of the advantages of investing in frontier Asia.<\/p>\n<ul>\n<li><em>Faster Growth<\/em> \u2013 Faster growth than emerging markets like Brazil, Russia, India and China.<\/li>\n<\/ul>\n<ul>\n<li><em>Youthful Population<\/em> \u2013 40% of the world\u2019s 14 to 25 year olds are in frontier markets, while North America, Japan and Europe together make up only 10% of this key consumer group.<\/li>\n<\/ul>\n<ul>\n<li><em>Low Debt<\/em> \u2013 On average, frontier markets have better balance sheets with only half the debt to GDP of developed markets.<\/li>\n<\/ul>\n<ul>\n<li><em>Integration With the Global Economy<\/em> \u2013 cellphones and the internet have made \u201ccatch up\u201d easier and faster.<\/li>\n<\/ul>\n<ul>\n<li><em>Attractive Market Valuations<\/em> \u2013 Cheaper than both emerging and developed markets despite higher growth rates.<\/li>\n<\/ul>\n<ul>\n<li><em>Inefficient Markets<\/em> \u2013 Offer experienced fund managers opportunities to pounce on bargains.<\/li>\n<\/ul>\n<ul>\n<li><em>Low Correlation to Other Markets<\/em> \u2013 Frontier markets don\u2019t move in tandem with emerging or developed markets, offering the potential for lower portfolio volatility.<\/li>\n<\/ul>\n<p>The case for looking closely at these markets is compelling. This is why I\u2019ll be covering these markets at the upcoming <em>Investment U Conference<\/em> in San Diego.<\/p>\n<h2><strong>Frontier Market Snapshot<\/strong><\/h2>\n<p>Here\u2019s a snapshot of just some of the markets I\u2019ll be talking about.<\/p>\n<ul>\n<li>Vietnam \u2013 <strong>Market Vectors Vietnam ETF<\/strong> (NYSE: <a href=\"http:\/\/www.google.com\/finance?q=VNM\" rel=\"nofollow\" target=\"_blank\">VNM<\/a>)<\/li>\n<\/ul>\n<p>Vietnam\u2019s market is on fire, up 20% so far in 2012.<\/p>\n<p>Still, it offers good value as it evolves into one of Asia\u2019s lowest-cost manufacturing hubs with wages about half that of China. With a 97% literacy rate and a youthful population of 87 million and ample natural resources, <a title=\"The Most Irresistibly Undervalued Country in Southeast Asia\" href=\"http:\/\/www.investmentu.com\/2011\/January\/emerging-markets-of-vietnam-vs-singapore.html\">Vietnam<\/a> offers huge potential if its government will only get out of the way.<\/p>\n<ul>\n<li>Indonesia \u2013 <strong>Aberdeen Indonesia Fund<\/strong> (AMEX: <a href=\"http:\/\/www.google.com\/finance?q=IF\" rel=\"nofollow\" target=\"_blank\">IF<\/a>)<\/li>\n<\/ul>\n<p>Indonesia has been one of my favorites for quite some time.<\/p>\n<p>Three times the size of Texas, <a title=\"Indonesia\u2019s Emerging-Market Growth Story\" href=\"http:\/\/www.investmentu.com\/2011\/June\/indonesia-emerging-market-growth.html\">Indonesia<\/a> is a democracy with the fourth-largest population in the world. The country is on a roll, fueled by better fiscal policies. It\u2019s the only country in the G 20 (largest 20 economies in the world) to have declining government debt\/GDP, which also has a balanced budget. Foreign investment and exports are rising and the country is home to natural resources such as oil, natural gas, coal, tin, rubber and palm oil.<\/p>\n<p>The World Bank reports that Indonesia has the planet\u2019s fastest-growing middle class, and they\u2019re a savvy group. Indonesia represents the world\u2019s third-largest user of Facebook, behind the United States and the U.K. Challenges include the need for much better infrastructure and confronting corruption.<\/p>\n<ul>\n<li>Myanmar\/Burma<\/li>\n<\/ul>\n<p>Burma is in transition to ending 50 years of economic and political isolation.<\/p>\n<p>It was once one of the wealthiest countries in the region as a major port and source of natural resources. To get a feel for its potential, just look at neighboring <a title=\"How the Current Political Unrest Could Trigger an Eastern Opportunity\" href=\"http:\/\/www.investmentu.com\/2011\/March\/thailands-emerging-market.html\">Thailand<\/a>, which has an economy 10 times larger. A beautiful country with many historical sites, the country\u2019s biggest opportunity out of the box is tourism. While Thailand had more than 12 million visitors in 2011, Burma had only 200,000.<\/p>\n<p>Despite my enthusiasm for frontier Asia, the biggest challenge, for me, so far has been finding easy ways to capture frontier Asia growth. Investing directly in frontier Asian companies is a daunting task for most investors, and frontier market funds have most of their assets in the Middle East and Africa.<\/p>\n<p>This is why I\u2019m so interested in learning more about <a href=\"http:\/\/www.leopardcapital.com\/\" rel=\"nofollow\">Leopard Capital\u2019s<\/a> upcoming Leopard Asia Frontier Fund. I have watched Leopard\u2019s progress in frontier Asian private equity with keen interest. I\u2019m thinking this on-the-ground experience will give them a serious leg up on competitors.<\/p>\n<p>I look forward to meeting those of you who are coming to San Diego. Don\u2019t miss Leopard Capital CEO Doug Clayton\u2019s speech on investing in frontier Asian markets.<\/p>\n<p>Good Investing,<\/p>\n<p>Carl Delfeld<\/p>\n<div>\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=KCCg5emX1XQ:zHVkFn2Lc-8:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=KCCg5emX1XQ:zHVkFn2Lc-8:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=KCCg5emX1XQ:zHVkFn2Lc-8:V_sGLiPBpWU\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=KCCg5emX1XQ:zHVkFn2Lc-8:qj6IDK7rITs\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?d=qj6IDK7rITs\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=KCCg5emX1XQ:zHVkFn2Lc-8:gIN9vFwOqvQ\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=KCCg5emX1XQ:zHVkFn2Lc-8:gIN9vFwOqvQ\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?a=KCCg5emX1XQ:zHVkFn2Lc-8:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/InvestmentU?i=KCCg5emX1XQ:zHVkFn2Lc-8:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/InvestmentU\/~4\/KCCg5emX1XQ\" height=\"1\" width=\"1\" \/><\/p>\n<p>Article by <a href=\"http:\/\/www.investmentu.com\/\" target=\"_blank\">Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>China&#39;s economy has grown by over 1000% since 1990. For similar growth opportunities, look no farther than Asia&#39;s frontier markets. You may be reading quite a bit about China\u2019s property bubble, higher manufacturing costs, slowing economic growth and its attempt to shift gears to a consumer-led economy. What\u2019s next for China is debatable, but there\u2019s &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/www.investmacro.com\/fx\/2012\/03\/16\/investing-in-asias-frontier-markets\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Investing in Asia\u2019s Frontier Markets&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-28300","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=28300"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/28300\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=28300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=28300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=28300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}