Barron’s: Buy Emerging Markets

Where the Buys Are

Emerging markets are cheaper than their developed counterparts with far more growth. Earnings for the MSCI Emerging Markets index are expected to grow at 15% over the long term, versus 12% for MSCI World index.

Recent Change P/E** 2011**
Market Index Level YTD 1-Yr 3-Yr* 2011 2012 Price/Book
Brazil Bovespa 52,482.82 -23.30% -21.40% -0.10% 8.6 7.6 1.2
Comments: Latin America’s economic dynamo selling at relatively low valuation.
China Shanghai 2,534.36 -8.9 -4 5.1 11.7 9.7 1.8
Comments: Concerns of hard-landing for economy could be priced into stocks.
Russia RTS 1,535.72 -10.5 8.6 -2.4 5 4.7 0.9
Comments: Should benefit if oil stabilizes, and very cheap.
South Korea Kospi 1,744.88 -9.3 5.6 7.4 8.7 7.6 1.1
Comments: Some analysts expect 2011 GDP to grow a sturdy 5%.
Taiwan Taiex 7,342.96 -15.1 -3.9 6.7 12.9 10.7 1.5
Comments: Reasonably valued, big commodity exporter.
India Sensex 16,469.80 -19.7 -9.8 5.4 13.4 11.5 2.4
Comments: One of worst-performing markets this year but GDP still growing strong.
MSCI Emerging Markets 41,204.16 -14.5 -4.6 1.1 12.6 N/A 1.9
Comments: Impressive GDP growth, well-run economy merit premium valuation.
MSCI World 782.98 -12.8 -2.8 -6.5 14.4 N/A 1.8
*Annualzed. **Estimated. Sources: Bloomberg; MSCI

China, Brazil and South Korea, it bears noting, are among the biggest and most liquid markets in the developing world.

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Source:
It’s Time to Buy
CHRISTOPHER C. WILLIAMS
Barron’s AUGUST 20, 2011
http://online.barrons.com/article/SB50001424052702303858904576514653430949260.html

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