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Investing In High Growth Developing Countries Known as MINT


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Why Invest In High Growth Developing Countries Known as MINT

Investing In High Growth Developing CountriesInvesting in high growth developing countries is one of the best ways to profit from the ongoing economic growth in some of the fastest growing economies in the world.  At the very least, a portion of a long-term investment portfolio should be invested in a way to gain exposure to high growth developing countries to capture the economic growth gains. Investment advisers group developing countries that have similar economic profiles together to make them easier for investors to understand.  One of the latest groups are the MINT countries, which consist of the fast growing developing countries Mexico, Indonesia, Nigeria, and Turkey (MINT).

MINT Countries

What the MINT countries have in common is ongoing infrastructure build-outs, steadily increasing middle classes, and declining poverty rates, all of which contribute a higher Gross Domestic Product (GDP) per capita over time.  These positive trends increase economic growth, due to a growing domestic consumer market, which has a positive economic feedback in that it leads to additional job creation and even higher rates of economic growth.  These are good trends for the quality of life of the people that live in the MINT countries, and are also good trends that investors can profit from by positioning their investment portfolios to invest in these fast growing countries.

Investing In High Growth Developing Countries Known as MINT

The following are Exchange Traded Funds (ETFs) that can be used for investing in high growth developing countries known as MINT countries.

  • iShares MSCI Mexico Capped (EWW) tracks the investment results of the MSCI Mexico Investable Market Index (IMI) 25/50, which consists of stocks traded primarily on the Mexican Stock Exchange.
  • Deutsche X-trackers MSCI Mexico Hdgd Eq (DBMX) is designed to track the performance of the MSCI Mexico IMI 25/50 US Dollar Hedged Index, by passively mimicking the index.  The fund provides exposure to Mexican equity markets, while using financial instruments to reduce fluctuations in value due to differences between the two countries’ currencies.
  • ProShares Ultra MSCI Mexico Capped IMI (UMX) is a leveraged ETF that is designed to deliver two times (2x) the daily performance of the MSCI Mexico IMI 25/50 Index, by investing in securities and derivatives that should provide two times (2x) the daily return of the tracking index.
  • ProShares UltraShort MSCI Mexico Cpd IMI (SMK) is a leveraged ETF that is designed to deliver two times (2x) the inverse of the daily performance of the MSCI Mexico IMI 25/50 Index, by investing in securities and derivatives that should provide two times (2x) the daily return of the tracking index in an inverse manner.  SMK is designed to increase in value by two times (2x) the amount the MSCI Mexico IMI 25/50 Index falls on a given day, and vice versa.  SMK should be used when a trader believes Mexican stocks are due for a pullback or correction.
  • iShares MSCI Indonesia (EIDO) is a fund designed to track the investment results of the MSCI Indonesia Investable Market Index.  The fund invests in  equity securities listed on stock exchanges in Indonesia.
  • Market Vectors Indonesia Small-Cap ETF (IDXJ) is a fund for investors that want exposure to Indonesian small capitalization stocks.  The fund replicates the holdings of the Market Vectors Indonesia Small-Cap Index.  A company included in the index and fund must be incorporated in Indonesia or outside of Indonesia, but generates at least 50% of its revenues or has more than 50% of its assets in Indonesia.
  • Market Vectors Indonesia Index ETF (IDX) is an ETF that invests in securities of Indonesian companies included in the Market Vectors Indonesia Index.
  • Global X MSCI Nigeria ETF (NGE) tracks the MSCI All Nigeria Select 25/50 Index.  The fund invests in securities that comprise the underlying index, which includes a broad segment of Nigerian stocks.
  • iShares MSCI Turkey (NYSE:  TUR) invests in stocks included MSCI Turkey Investable Market Index, which is comprised of stocks that are either based in Turkey or generate a significant portion of their revenue from Turkish operations .

Be Cautious When Investing In MINT Countries

Investing In MINT CountriesInvestors need to keep in mind that investing in high growth developing countries known as MINT countries carries with it some investment risks, including risks that many investors that primarily invest in domestic companies may not be familiar with.

Developing countries may suffer internal political turmoil that could develop quickly and unexpectedly.  While none of the MINT countries appears to be unstable, perception is very important to investors, and any political instability could cause a drop in stock prices within an affected country.  A prolonged period political instability could affect corporate profits and cause investments to stagnate.  Also, if the local currency experiences devaluation against the United States Dollar, it could cause an investment to lose value in United States Dollar terms, even if the investment does well in local currency terms.

Investing in MINT countries provide an investor exposure to fast growing developing economies that are growing much faster than the developed world, and will continue to do so for the foreseeable future.  While it is enticing to throw a lot of money at fast growing developing economies, they should only make up a portion of an investment portfolio to limit the political, economic, currency risks associated with investing in developing economies.

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