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.

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)

Recommended

Emerging markets fall behind their developed-world counterparts
Emerging markets

Emerging markets fall behind their developed-world counterparts

While developed-world markets look forward to a recovery, emerging market stocks have tumbled as foreign investors pull out cash.
16 Apr 2021
Four of the best investment trusts for investing in emerging markets
Investment trusts

Four of the best investment trusts for investing in emerging markets

Investors need to tread very carefully in this risky sector. Here are the best ways to approach it
22 Mar 2021
Storm brews in emerging markets as investors pull cash out
Emerging markets

Storm brews in emerging markets as investors pull cash out

Foreign investors have begun to pull cash out of emerging markets as they begin to look less attractive when compared to the rising return from holdin…
12 Mar 2021
Share tips of the week
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.
19 Feb 2021

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
What does the Coinbase listing mean for bitcoin and other cryptocurrencies?
Bitcoin

What does the Coinbase listing mean for bitcoin and other cryptocurrencies?

As the bitcoin price hit new highs, the world's biggest cryptocurrency exchange, Coinbase, listed on the stockmarket. John Stepek looks at what that m…
15 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021