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Beyond Brics: the emerging economies defying the squeeze
by Sarah Miloudi on Sep 27, 2012 at 09:00
More than a decade on since Brazil, China, India and Russia were pulled together under Jim O'Neill's Brics banner the clutch of countries is starting to feel the pinch.
But rather giving up on the longer term growth opportunity, focusing it more directly on the likes of Indonesia and Thailand in the near-term may be the best route of harnessing the Brics' current potential.
Pinakin Patel, part of the Far East equity team at JP Morgan Asset Management, says the political tensions in China and India will see the two nations face a choppy time over the months ahead.
But leaving these difficulties to one side, China and India's longer term characteristics as nations offering growth through their burgeoning middle classes and expanding infrastructure means the investment case continues to hold true.
'Whilst we may continue to see volatility in both China and India over the shorter-term, the long-term structural story remains in tact.
'In China the long-term opportunities are being created as China rebalances its economy away from export and infrastructure towards an economy that is driven by consumer demand,' Patel said.
These themes are being played out in the asset manager's single-country closed-end funds, with the £120 million JP Morgan Chinese Investment Trust, for example, adding to policy sensitive stocks as the Tiger's leaders grapple with the political inflection point they face.
This decision paid off for the vehicle during August, with the trust outperforming a falling market and growing its net asset value (NAV) by 2.9% versus the 1.9% rise in its benchmark.
To hear more about the Brics and emerging economies the asset manager is backing listen to Patel's video.