Guest article written for AllAboutAlpha.com – the official publication of the Chartered Alternative Investment Analyst (CAIA) Association
originally posted at: http://allaboutalpha.com/blog/2011/09/15/alpha-hunter-jim-oneill-gsams-man-of-brics/
With over US$714 billion under management, Goldman Sachs Asset Management (GSAM) ranks as one of the top 10 asset managers in the world. At the helm is Jim O’Neill, one of the world’s most respected economists and market commentators who coined the term BRICs (referring to Brazil, Russia, India and China) in his prominent 2001 paper “The World Needs Better BRICs” and has been referred to as “… the top foreign-exchange economist anywhere in the world in the past decade…“. In this interview, we look at where the biggest opportunities and risks in the global market.
Q: What are your views on the investment opportunity presented by Emerging (BRIC) economies together with the Arab World?
Jim O’Neill: I think the strategic investment opportunity in the BRIC economies remains really big. This decade, their GDP will increase by about $12 trillion, i.e. they will create another one of themselves! More importantly, the share of consumption in this decade’s growth will be bigger and this is where the big opportunity lies. I am especially optimistic about the Chinese consumer. All BRIC markets are currently reasonably valued, but I prefer China the most, followed by Russia, then Brazil and India. But the BRIC’s remain the biggest economic and investment theme out there. As far as other so called emerging markets are concerned, I focus on 2 groups, one the so-called “next 11″ or N-11, which are the largest populated countries after the four BRIC countries, and the “growth economies” as I call them, which are the 4 BRIC countries plus 4 of the N-11; Indonesia, Korea, Mexico and Turkey. Within the N-11, I am quite excited about some others which would include Nigeria. Egypt and Iran are both part of the N-11 and of course, have many challenges, but probably ones to keep an eye on. Continue reading