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Do you see opportunity outside of the United States?

By Matt McCall

I am a huge fan of China as many of its stocks are currently trading at valuations well below those of their comparable U.S. peers. China already boasts the second-largest economy in the world and continues to have one of the best GDP growth rates of all emerging and developed nations, and yet looking out over the long term there is no question that the upside potential of its economy is still far greater than that of nearly any other country.

But investment opportunities don’t only come from emerging markets. Prior to graduating to emerging market status, countries are first referred to as frontier markets, and a lot of these smaller nations are also on my radar for investment potential. It’s a lot like investing in companies – if you get in early, you can make a lot of money.

I’m keeping a particularly close eye on the N-11, which is a group of 11 countries that are considered high-growth. The list includes South Korea, Indonesia, Iran, Mexico, Philippines, Turkey, Bangladesh, Egypt, Nigeria, Pakistan and Vietnam.

The N-11 holds a lot of upside potential, and over the long term I believe that these countries as a whole will grow at a higher pace than the total global economy. Their combination of population growth, the emergence of the middle class and geographic locations will lead to booming economies and therefore strong stock markets. Because this theme will take years to play out, we need to take a long-term approach and stay patient.

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