How To Profit With ETFs From A Mega-Trend In The Global Consumer (KXI, CHIQ, INCO, BRAQ, CARZ)
Rudy Martin: In my 25 years of actively trading in the markets, I’ve learned there’s only ONE secret to making profitable investments.
Simply follow the money.
One of the ways we’re doing that right now in my Global Trend Trader service is by shadowing the moves of the up-and-coming global consumer. Where we see them spending the biggest bucks — or, rather, yuan, reais, lira and their other respective currencies — we’ll be looking for the best ways to invest in their most-prominent spending patterns, right here at home!
If you haven’t yet met these soon-to-be-critical-to-your-investment-success global consumers, now is the time to get familiar with them. That’s because they are already starting to unleash a flood of money into the worldwide marketplace, not unlike the Greatest Generation did for the U.S. economy after World War II.
Only this time, the ripple effect of their spending will be felt around the globe. And for investors with a bit of a sense of adventure, in their trading accounts!
Most Americans know the story of the U.S. Baby Boom. Between 1946 and 1964, birthrates in the United States doubled due to economic and social change after World War II.
These 77 million “Baby Boomers” contributed to a historic upswing in spending and consumption. Whether it was purchasing a home in the suburbs or a second car, this pursuit of a higher quality of life had a lasting effect on the U.S. economy.
Over the decades following the start of the Baby Boom, companies that successfully provided goods and services to this burgeoning demographic segment had an opportunity to grow revenues and expand their reach in the marketplace.
And I believe that now a similar trend may be occurring throughout the globe — one that will introduce scores of opportunities for investors over the long term.
This Trend Is Different Than What We Experienced in the U.S.
It’s occurring on a much larger, global scale. The Brookings Institute estimates that by 2020 over half of the world’s middle-class consumption will come from emerging economies, with China and India representing 40% of that.
Like the Baby Boom, middle-class populations in many of these emerging economies are experiencing substantial growth, fueling competition among high-quality companies.
Today, the developing economies already represent 30% of all luxury good sales globally, based on a Bain & Company study. We’re seeing signs of this in the international sales trends of companies like Tiffany (NYSE:TIF) and Coach (NYSE:COH).
And in China alone, middle-class households are projected to increase their spending from $100 billion in 2010 to $1.2 trillion by 2020, according to Oxford Economics.
While improving economic conditions have allowed hundreds of millions of people to pursue a higher quality of life, they have also positively influenced growth in telecommunications, transportation, and energy infrastructure.
In doing so, the greatest consumer demographic trend in human history has unleashed a secondary wave of global infrastructure investment programs estimated in the trillions as well.
There are hundreds if not more than a thousand ways to play the emerging global consumer, and you can do so quite easily here on the U.S. exchanges. I tend to prefer U.S.-listed or -based companies, or even the American Depositary Receipts (ADRs) of overseas corporations.
In fact, just yesterday I released a major global consumer play to my subscribers, and if you sign up for my Global Trend Trader service, you’ll get instant access to it. (This trade has already started taking off — click here to start your membership right away!)
But if you’re looking for an easy way to get exposure to this powerful mega-trend, there are a number of ETFs that invest in the Global Consumer idea. Here are five worth considering:
- iShares S&P Global Consumer Staples Index Fund (NYSEARCA:KXI)
- Global X China Consumer ETF (NYSEARCA:CHIQ)
- EG Shares India Consumer ETF (NYSEARCA:INCO)
- Global X Brazil Consumer ETF (NYSEARCA:BRAQ)
- First Trust NASDAQ Global Auto Index Fund (NASDAQ:CARZ)
Considering the economic impact that 77 million Baby Boomers had on the U.S. economy, the impact of 960 million middle-class consumers on emerging and global market companies will be dramatic. And this could set us up for the biggest stock market rally of all-time. Whatever you do, don’t miss out on it!
Uncommon Wisdom (UWD) is published by Weiss Research, Inc. and written by Sean Brodrick, Larry Edelson, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in UWD, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in UWD are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Andrea Baumwald, John Burke, Marci Campbell, Selene Ceballo, Amber Dakar, Roberto McGrath, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Marty Sleva, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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