How You Can Catch the New Boom in Emerging Markets

If you wanted to cash in on booming economic growth in other parts of the world, how would you invest your cash?

Too many investors seem to think there’s only one way to go about it.

These punters follow the financial headlines about emerging markets…most notably, China…and they draw one simple conclusion.

Sure, they understand that China’s long journey towards the first world has only just begun. And they get it that China’s journey drives an insatiable thirst for imported resources.

But here’s the thing. Because the mainstream Aussie financial press love to mimic each other — safety in numbers, I guess — many investors will only ever hear one story about the impact of Chinese growth on our shores. I’m talking about the well-worn story of Chinese steel production and the rocks Aussie miners dig out of the ground to feed it.

It’s a tale that leads these kinds of investors to draw a simple conclusion: to play the rise of China, you’ve got to buy stocks in Aussie iron ore exporters.

I don’t know about you, but I start to get bored at some point between the 100th and 200th time I hear that call.

Sometimes Aussie business journalism sounds like it comes out of an echo chamber.

I don’t want to take anything away from iron ore exporters. In fact, some of the players in that space that my mate Jason Stevenson has picked for Diggers & Drillers look positively fascinating…and their growth prospects are fantastic.

But I’ve found that the deeper you dig, the more likely you are to uncover a rough gem.

The beauty of this boom – the rise of China’s middle class – is that exciting, innovative, sometimes peculiar and often unknown Aussie companies will reap huge benefits across a broad range of sectors for decades to come.

What’s more, the biggest winners from an investor’s point of view won’t necessarily be the companies that have the biggest market cap today.

Today I’ll show you a useful example of how Aussie companies beyond the mining sector could benefit from the rise of China. Firms in this sector don’t explore for exportable rocks. But they’re rushing to meet growing demand…and the growth prospects that they offer investors are compelling.

Feeding the Emerging World

The vision of Australia as ‘Asia’s foodbowl’ is getting closer to reality. I’ll admit that for a long time that vision had been a pipedream. Farmers and other lobbyists had pushed the idea seeking government assistance and little more. But if you look past the politics, you can see why agricultural exporting is gaining momentum as an investment theme.

You see, emerging economy diets are becoming more ‘intensive’. This means people in places like China and India are eating fewer cereals and more meat, dairy, sugar and oils. These emerging economies are leading the growth in global demand for satisfying food.

Read the rest of this article at Money Morning