From Jason Zweig writing at the WSJ's Intelligent Investor:
The investment visionary who coined the term "emerging markets" and
helped launch the first funds to invest in developing countries thinks
he has spotted what you might call the next great emerging market.
It is called "the United States."
Antoine van Agtmael is arguably the founding father of
emerging-markets investing. He still is an evangelist for investing in
parts of Africa, Asia, Latin America and other less-developed regions,
where he thinks the future remains bright. But he believes the U.S. is
at the beginning of an industrial revitalization that most analysts only
have begun to recognize.
Over the past year, investors have pulled $22 billion from U.S. stock funds and added $339 billion to bond funds, according to Morningstar
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. If Mr. van Agtmael is right, that exodus is premature.
Mr. van
Agtmael, now 68 years old, has been analyzing emerging markets since
1971. In the late 1970s he ran an investment bank in Bangkok as the
local stock market boomed and then fizzled. That taught him the enormous
potential—and explosive risk—of stocks in developing countries,
highlighting the urgent need for diversification.
Later, at the International Finance Corp., an affiliate of the World
Bank, Mr. van Agtmael helped create the first database of stock returns
and pushed to launch a diversified fund to invest in what was then
called the Third World.
After he came up with the catchier term "emerging markets," the first
such portfolio was launched by Capital International in 1986 with $50
million. Today U.S. fund investors alone have more than $420 billion in
emerging markets.
Mr. van Agtmael founded an investment firm, Emerging Markets
Management, in 1987. It peaked at more than $20 billion in assets before
he and his partners sold a 63% stake to Ashmore Group
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in 2011 for more than $126 million.
So when Mr. van Agtmael says
he sees an underappreciated investment opportunity, he is worth
listening to. When he visited China last year, one manufacturing
executive after another complained to him about American competition,
"something I had never heard in 40 years in Asia," he says....MORE
