Kalus-Bystricky is trying to learn more about Indonesia. "It's a big place and potentially can be a much bigger player on the global stage," she says. "From a macro perspective, it looks fabulous." The consensus is that the country will see growth through 2016 of 6.5%; labor is cheap and GDP per capita growth has tripled since 2005, she says. She thinks the sweet spot in Indonesia will be consumer goods, transportation and financial services companies.
Her Mexico-related holding is Belgium-based global brewer Anheuser-Busch InBev, the largest stakeholder in Mexican brewer Grupo Modelo. AB InBev announced plans this year to acquire the remaining stake in Grupo Modelo that it does not already own. But she has eschewed South Korea, because she says it's hard to find companies there that meet Pax World's rigorous criteria for strong corporate governance.
Advisor Input
St. Louis-based EverBank Wealth Management, part of EverBank Financial Corp., provides high-net-worth individuals with exposure to the MISTs and other emerging markets through various asset classes. Its main equity exposure is through the Aberdeen Emerging Markets Fund (GEGAX) and the Vanguard MSCI Emerging Market ETF (VWO). The firm also invests in debt offerings such as the Templeton Global Return Fund (TGTRX) and the SPDR DB International Government Inflation-Protected Bond ETF (WIP).
EverBank also offers FDIC-insured certificates of deposit for single currencies and baskets of currencies. Its new MarketSafe CD will provide exposure to South Korea, Turkey, Israel and Colombia. By accessing currencies through CDs, investors can get exposure to the upside without downside risk, says Chris Gaffney, co-chief investment officer of EverBank Wealth Management and director of sales for the World Markets division of EverBank.
EverBank first looks at countries' fundamental factors, then macroeconomic factors and finally technical factors for entering and exiting markets. "Emerging markets are risky in general, but in the future I think that's where all the growth is going to occur," says Gaffney. "We feel that especially in these markets, capital preservation is going to be the key."