While the Australian sharemarket has had an impressive year with a rise of 28%, some emerging countries have had even better performance.
The good news for investors is that different or exotic markets are more accessible than ever with the ability to buy Exchange Traded Funds (ETFs) just like shares through the Australian sharemarket.
While advanced countries are expected to see sluggish growth in 2010, it's the emerging nations which are expected to outperform.
Emerging nations can often be more risky but also more rewarding.
The IMF is predicting growth of 5% in 2010 and the rebound is expected to be driven primarily by China and India.
China is an area that has been booming and once again in 2009 has been a solid performer with the Shanghai composite gaining 80%. With the IMF predicting another 9% growth in 2010, it's an area that is expected to fuel global growth.
China has a population of around 1.3 billion, accounting for almost 20% of the world's population. In actual fact, the population of China is probably somewhere between 1.3 billion to 2 billion. The problem is that not even China's own government accounts for its entire people, and therein lies the problem of investing in China. Sometimes the data and numbers that are published need to be read with a grain of salt.
India is the other area which is expected to show strong growth with GDP expected to rise by 6.4% in 2010.
India's economy is different to China's in that it is powered along by the services sector. If China is the manufacturing capital of the world, India would be the service capital of the world.
In fact the services area accounts for one third of the country's output measured by GDP. Corporations outsource call centres and other services to India due to the cheap but highly educated labour force.
Often, when talking about emerging nations, investors refer to the BRIC nations which include:
While India and China are predicted to see strong growth in 2010, Russia is expected to have more anaemic growth of 1.5%. Brazil's predicted to grow GDP by 3.5%. (IMF figures)
I've talked before about exchange traded funds but just as a reminder…
If you are looking at investing overseas markets through ETFs, just be careful of currency fluctuations. Generally, you want the Aussie dollar to fall while you are invested overseas so that currency movements work in your favour.
Also like any investment, looking at the growth prospects and timing of your investment can be crucial.
Here is a list of International ETF's taken from the ASX website. Remember, you can buy and sell these funds just like shares.
Happy trading!
Julia Lee Equities Analyst Bell Direct Have you started trading with Bell Direct for just $15 a trade? Register now for free.