How to invest where new middle-class consumers will splash the cash

The rise of the middle-class consumer in emerging markets is the world’s most compelling long-term growth theme, says professional investor Kevin Carter. Here, he picks three of the best ways to buy in.

Each week, a professional investor tells us where he'd put his money. This week: Kevin Carter, CIO and founder of the Emerging Markets Internet & Ecommerce UCITS ETF.

We believe that the rise of the middle-class consumer in emerging markets is the world's most compelling long-term growth theme. Emerging markets account for 85% of the world's population and nearly 90% of its under-30s; their GDP is also growing at more than twice the rate of the developed world's (4.4% vs 1.8%). The conditions for what the consultancy McKinsey & Co. calls "the greatest growth opportunity in the history of capitalism" are now being realised.

Where consumption meets technology

As they raise their standards of living and purchasing power, the digitisation of their economies is accelerating, creating new tech giants on a par with or larger than their Western counterparts. Nine of the top 20 internet companies in the world are based in emerging markets; seven of them didn't exist seven years ago.

Advertisement - Article continues below

We are living through one of the greatest leaps forward in economic growth in history. Investors are looking for ways to gain targeted exposure to this secular growth story.

MercadoLibre:South American's e-commerce favourite

MercadoLibre (Nasdaq: MELI)

Pinduoduo: savings and fun in China

Pinduoduo (Nasdaq: PDD)

This method has facilitated rapid adoption in China's smaller cities. With only around 60% of the Chinese population owning a smartphone, the largest internet population in the world still offers ample upside.

MakeMyTripLIndia's top travel company

MakeMyTrip (Nasdaq: MMYT)




Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Jan 2020
Share tips

Share tips: eight stocks that should deliver robust returns

Ryan Ermey of US publication Kiplinger’s Personal Finance chooses his favourite stocks for the next decade, which should be able to grow for years.
28 Dec 2019
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019

Most Popular

Industrial metals

Governments’ money-printing mania bodes well for base metals

Money is being printed like there is no tomorrow. Much of it will be used to pay for infrastructure projects – and that will be good for metals, says …
27 May 2020
Investment strategy

Are you a permabear? Three red flags to watch out for

Contrarian investors are often seen as bearish because the market tends to go up over time. But if that bearishness goes too deep, you risk seriously …
26 May 2020
Investment gurus

Nouriel Roubini: lacklustre recovery followed by a depression

We may see a U-shaped recovery at first, but then will come the L-shaped depression, says Nouriel Roubini.
26 May 2020