“We think it is of vital importance to consider the prospects for growth in India, China and Europe, as each area by population is much larger than North America or, in the case of GDP, where Europe is the largest economic zone in the world.”
China is transitioning from an external export-led growth model to one of internal efficiency. In India, the opposite is true, and political and economic reforms seem to be accelerating growth from a very low base. India is approaching the level of GDP per capita where domestic demand can accelerate based on domestically generated savings and capital investment. Japan is stuck in a demographic trap. While we find investable companies exist in Japan, the outlook for domestic growth is very bleak.
In Europe, a devalued Euro and a replenished banking system are good for growth. This will lead to limited consumption growth due to a weak fiscal environment and aged demographic profile. We find many world-leading companies in Europe in which to invest. In fact, European companies are far more global than their American peers, judging by the revenue and profit mix of the businesses listed on the related markets.