How to Invest in the ‘Next 11′ Countries

The ‘Next 11′ (N-11) is a list of fast-growing countries identified by Goldman Sachs as potentially good investments in the coming years. Words: 682

In further edited excerpts from his original article* Ron Rowland (www.moneyandmarkets.com) goes on to say:

The ‘First 4′
The ‘First 4′ are the so-called “BRIC” countries. BRIC is an acronym coined by Goldman Sachs a few years ago to describe four top emerging markets:

1. Brazil
2. Russia
3. India
4. China

These countries have a huge part of the world’s economy and natural resources and together they account for about 25 percent of the world’s land mass and 40 percent of the global population. As big and influential as they are, however, the BRICs are already well-known among professional investors and that’s where the ‘Next 11′ countries come in … they’re the next big growth stories.

While they aren’t on the scale of the BRIC nations, the ‘Next 11′ countries all have large populations. Indonesia is the largest at about 229 million, while South Korea is the smallest with around 48 million. More importantly, their populations are growing — not shrinking as is the case in many developed nations. Other things being equal, more people usually means more business opportunities …

When you combine a good-size, growing population with a modern industrial base you get a critical mass – the ability to produce consumer goods, and the consumers who can afford to buy them. Having natural resources, such as oil, in your back yard helps too. All of this creates the potential for major consumer and business growth and the investment opportunities — for those who are patient and do their homework — could be enormous!

The ‘Next 11′

1. Mexico
2. Nigeria
3. Egypt
4. Turkey
5. Iran
6. Pakistan
7. Bangladesh
8. Indonesia
9. Vietnam
10. South Korea
11. Philippines

I’m surprised that Mexico is the only country in the Americas present on the’ Next 11′ list. I personally believe some countries like Chile, Peru, and Argentina are also capable of showing tremendous growth in the decades ahead. Then again, it’s Goldman Sach’s list — not mine.

Are the ‘Next 11′ countries “Emerging Markets?” That depends how you define the term. South Korea, for instance, is as modernized as the U.S. and France. The same holds true for parts of the others. The point isn’t where they are now. The point is where they are going in the long run — and from everything I’m seeing, the answer is bound to be up!

How to Invest in the ‘Next 11′
I wish I could tell you about an exchange traded fund (ETF) that gives you easy access to the top companies in the ‘Next 11′ countries but, unfortunately, none exists at the moment although an index provider for fund sponsors, Structured Solutions AG, already has three ‘Next-11′ related indexes up and running and, as such, we’re sure to see ETFs based on these indexes hit the market soon.

In the meanwhile, you can get part way there with single-country ETFs that provide exposure to some of the ‘Next 11′ markets such as:

a) iShares MSCI Mexico (EWW)
b) iShares MSCI South Korea (EWY)
c) iShares MSCI Turkey (TUR)
d) Market Vectors Indonesia (IDX)
e) Market Vectors Vietnam (VNM)

If you buy any of these ETFs, be sure to invest only a small slice of your portfolio. The long-term prospects are great for all of them, but in the meantime you could see some huge short-term swings

*http://www.moneyandmarkets.com/who-are-the-next-11-37234 (Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil.)

Editor’s Note:
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