Investors seeking sustained growth in their portfolios should follow in the footsteps of Starbucks and look to the BRIC countries (Brazil, Russia, India and China), says Nigel Green, the chief executive of the deVere Group.
The comments come as it is announced that the global coffee shop chain is set to open its first establishment in India next month as part of an overall investment of USD78m in the subcontinent. To date, India is the only BRIC market that Starbucks has not entered, despite claims that most of the firm’s future growth strategy is being pinned on these emerging markets.
“Starbucks are fully aware that compared to the Western equivalents, BRIC economies hold huge potential to investors, with much of this potential being fuelled by consumers,” says Green.
“Aggregate consumption between the four countries is currently estimated to be around USD4trn and this is expected to grow by around 15 to 20 per cent. Therefore by the middle of the decade, the BRIC nations will see their combined consumption increase by more than a trillion dollars – and this is a conservative estimate.
“Bearing in mind these immense figures, and considering that the BRIC countries are not riddled with debt, are rich in resources, are home to a young and increasingly educated and wealthy population, and because diversification is crucial in the current economic climate, it would be crazy for investors not to consider following Starbuck’s strategy and include BRIC-based investments in their balanced portfolios.”
Investing in these four countries is now more accessible than ever, according to the deVere Group, which has recently selected Goldman Sachs Asset Management, who are specialists in global investment solutions including mutual funds in BRIC countries, as one of its preferred fund advisers.