There no longer appears to be any debate as to which geographic region or countries will have the strongest growth going forward. The compounding effect of Chinese and Indian growth continues to place them in an ever more important global position. Clearly the thing to do as an investor would be to gain exposure to these areas by buying Chinese and Indian equities.

However, there is an alternative route, and one that is perhaps more liquid and appropriate for many investors, to gain exposure to the specific areas where pricing is reflected by those expanding economies rather than by the more sluggish western ones, namely commodities.

High quality commodity equities are a pure play on emerging economies, but also a levered one. Their leverage comes not only from the ongoing increase in demand as these economies expand via industrialisation and urbanisation, but also because these companies have long term reserves, ongoing exploration and mineable higher cost deposits they can take advantage of if appropriate.



That brings us very importantly to duration. To take advantage of a secular theme, you need long duration assets, and these companies with their 25-40 year mine lives represent the ultimate in that category. Their listing on major exchanges ensures that they have had to meet stringent listing requirements.