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Global Market Rally: Russian Rewards vs. Canadian Stability

The best way to ride the rally? Play the global marketplace, said two portfolio managers on “Closing Bell.”

Christopher Smart, director of international investments at Pioneer Investments, said emerging markets show strong demographic trends. He’s eyeing South Africa, for example, where the government is allocating some $5 billion a year on infrastructure over the next five years.

“The growth is not coming from Canada,” Smart said. “It’s coming from markets that are maybe a little more volatile, but over the longer period of time… the stocks that you invest in South Africa, in Brazil, [and] in China are going to give you much better return.”

Russian spending power, for instance, has grown at a 20% to 25% rate in recent years, he said. “And, there’s no sign of that stopping.”

But Donald Coxe, a global portfolio strategist at BMO Financial Group, urges investors to exercise caution. He thinks Canadian and Australian markets are the wisest choices, especially in the mining sector: “You don’t have the kinds of risk you have in Russia,” he said. “They have lots of mines in Russia, but [they’ve] got lots of holes in the ground to pour your money down too. And, maybe a few bodies along the way.”