Top Resource-Rich Countries With Exposure To Emerging Markets

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The commodity markets saw a boom in the past few years due to soaring demand for various commodities in the emerging countries. Demand for natural resources such as coal, iron, oil and gas have been especially high from China, India, etc.

Many people have the misconception that only emerging and frontier markets are rich in commodities. That is not true since some developed countries also are rich in natural resources. These countries  supply natural resources to emerging and developed markets.

Some of the top resource-rich emerging and developed countries and are listed below with key additional details:
Click to enlarge



Source: Are Commodity-Rich Countries Worth a Look?

One way to profit from the economic growth of emerging markets is to invest in countries that sell the commodities to these markets. For example, Australia is a major supplier of coal, natural gas, iron ore to China. Similarly Brazil is a also major supplier to China and other emerging markets.

Like Australia, Canada and Norway are also unique since they are developed countries with huge natural resources. Canada is the largest supplier of crude oil to the U.S. and the Canadian economy is heavily dependent on the U.S. economy.

As the emerging markets noted above are highly commodity-based export-driven economies, any correction in commodity prices will have an adverse effect on them. Hence investors who looking to reduce risk but at the same time want to gain exposure to emerging markets can invest in companies in the developed countries noted above.

Related ETFs:

iShares MSCI Canada Index (EWC)
iShares MSCI Australia Index (EWA)
Global-X Norway ETF (NORW)
iShares MSCI All Peru Capped Index Fund (EPU)
iShares MSCI Indonesia Investable Market Index ETF (EIDO)
iShares MSCI Brazil Index (EWZ)
Market Vectors® Russia ETF (RSX)
iShares MSCI South Africa Index Fund (EZA)

Disclosure: No Positions

Why Gold Gets Ignored Compared to Other Assets

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Gold prices reached an intraday record $1,637.50 today as the U.S. debt crisis and the weaker-than-expected economic growth made investors flee equities and other risky assets to the safety of the precious metal.

In the past decade, gold has had an incredible run from under $300 an ounce to the current price outperforming stocks and bonds strongly. While some investors consider gold and other commodities as great investments, most ordinary and professional investors do not consider it as an investment vehicle. SPDR Gold Shares(GLD), the largest gold ETF in the world holds 1,263.58 tons of gold valued at over $66.0 billion. While that seems huge, the total assets held in large equity funds and equities is much higher.

There are many reasons why most investors disdain gold as an investment option. For example, unlike stocks and bonds gold does not produce an income such as dividends. So investors are purely betting on price appreciation. This strategy is not suitable for all investors.

Compared to other assets, the amount of gold available for investment purposes is tiny. While the global total value of stock and bond markets is $140 Trillion, the total value of investment gold is just $1.3 Trillion (or 1%) as shown below:


 

Source: Gold – Relic or Real Money by J. Michael Martin, J.D., CFP, Financial Advisor

Disclosure: No Positions

The World’s Largest Diamond Producers in 2009

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In June of last year I wrote a small post about the world’s top diamond producers in 2008. Botswana was the top producer then followed by Russia.

Russia became the largest diamond producer as shown in the the following chart for 2009:

Source: The Economist

Except Russia and Canada, the rest of the top producing countries are in Africa. Two of the large global diamond mining companies are Rio Tinto (RTP) and BHP Billiton (BHP, BBL). For a complete list of diamond mining stocks by country click here.

Update (Sept, 2016):

Click to enlarge

diamond-production-by-country-2015

Source: WSJ

Five Latin American Stocks Yielding More Than 5% Dividends

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The S&P 500 is up 6.3% YTD. Most emerging markets are down so far this year. The following are the YTD performance of select Latin American country indices:

  • Brazil Bovsepa: -13.5%
  • Mexico IPC All-Share: -8.0%
  • Chile IPSA: -6.2%

 

At current prices some Latin American stocks have high dividend yields. Five Latin American equities with current dividend yields of more than 5% are listed below:

1.Company: AFP Provida SA (PVD)
Current Dividend Yield: 9.03%
Sector:Investment Services
Country: Chile

2.Company: YPF Sociedad Anonima (YPF)
Current Dividend Yield: 7.47%
Sector:Oil & Gas – Integrated
Country: Argentina

3.Company: Empresa Nacional de Electricidad SA (EOC)
Current Dividend Yield: 5.96%
Sector: Electric Utilities
Country: Chile

4.Company: Telecomunicacoes de Sao Paulo SA Telesp (VIV)
Current Dividend Yield: 11.62%
Sector: Telecom
Country: Brazil

5.Company: Bbva French Bank SA  (BFR)
Current Dividend Yield: 11.32%
Sector: Banking
Country: Argentina

Note: Prices noted are as of market close July 26, 2011

Disclosure: No Positions