Mobius Talks BRICs

Templeton Asset Management’s Mark Mobius says he’s keying on two sectors in the BRIC nations (Brazil, Russia, India, and China): commodities and consumers.

“Companies that are strong in production of commodities such as oil, iron ore, nickel, platinum and other such products are favored,” Mobius writes in a Q&A on Templeton’s web site. “In the consumer area, we are interested consumer banking, retail and consumer disposable product companies.”

Mobius also expresses a positive outlook for India. “India’s macroeconomic fundamentals have significantly improved,” he says.

“The government has done a good job in managing the economy through the recent crisis and unlike companies in the U.S. and Europe; most Indian companies have healthy balance sheets and strong cash flows. The Indian stock market was a good performer in 2009 and we expect it to continue to outpace other emerging markets this year.”

Asked which BRIC nation he likes best in terms of stock investment in 2010, however, Mobius says it’s hard to say. “Our largest holdings are in Brazil, China and India but we are continuing to hold and purchase Russian stocks due to their attractive valuations and long-term potential,” he says. “All four markets present opportunities at the moment and it is difficult to pick any one over the others.”

Mobius also stresses that the BRICs bring with them volatility that investors must be ready for. “We believe that BRIC markets will continue to do well over the long run but over the short run, we must remember that these markets are volatile,” he says. “If an investor is not prepared to hold his investments for at least four or five years, he may not get to enjoy good performance on his investments.”

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