Why South Asia & BIC?
South Asian stocks directly benefit from their strategic location between the two fastest growing economies of India and China. Many of these economies also have access to shipping routes and port facilities. Also these economies are experiencing a strong trend toward a dual benefit from the rising wage structure, production costs, and currency strength in China and India.

  • The South Asian market region stretches nearly 1.75 million square miles with a population over 1.5 billion people representing one of the world’s largest markets.
  • Frontier South Asian (FSA) stocks directly benefit from their strategic location between the world’s two fastest growing developing markets of India and China.
  • Three of the 11 nations identified by Goldman Sachs as N-11 are major economies in the FSA.
  • The FSA market alone is home to over 550 million people and with a total GDP for the region in excess of USD$ 1.25 trillion.
  • Many of these economies also have access to shipping routes and port facilities that are vital to Indian and Chinese exports and imports.
  • FAS economies are experiencing a newfound base in manufacturing benefiting from the rising wage structure, production costs, and currency strengths in the major regional economies of China and India.
  • The region continues to be one of the fastest areas with 2010 GDP growth of 8.6%. The Asian Development Bank projects “Developing Asia” to grow a healthy 7.3% for 2011
  • Consumer demand growth in China and India is trickling down and having a domino effect in FSA market exports
  • The continued outsourcing trend and some of the lowest wage rates in the world benefit frontier economies as they are the lowest cost providers of labor in the region
  • FSA is one of the largest untapped expected consumer market regions in the world with a rapidly growing middle class
  • Majority of economies have active stock exchanges with over 1600 listed equities represented in the region
  • Continued trend of privatization of state-owned industries will add large number of investment opportunities and increased liquidity to the investable universe for the foreseeable future
  • Two of the world’s best performing stock markets in 2010 are located in the region
  • Median population age of 24.5 years for the region provides lower cost labor and supports higher a higher internal consumption growth profile than developing markets
  • A large geographic region with large natural resource deposits continues to attract sovereign and private commodity investors.
  • High demand for private market financing activities and a new emerging investing class in the regions is driving significant capital markets growth.
  • South Asia markets are lower valuation and higher growth rates to compensate for inherent risks.
  • Higher dividend yields provide income and may protect investors from management misallocation of corporate resources.
  • Returns on assets and equity are expected to significantly improve in the next several years due to technological and management advances.
  • Higher EPS and Cash Flow growth is projected due to economic growth and demographics.