The Way to Play Emerging Markets: Portfolio Manager

If you missed out on Appleand Google rallies, don't get down. You'll get a chance to ride the next tech boom in emerging markets, Ron Shah, founder and portfolio manager at Jina Ventures, told CNBC.

There are arguably many reasons to play emerging markets, which are up around 14 percent year-to-date. But Shah insists tech is the way to go.

“There are still a lot of concerns about industrial growth, and China’s economic growth. Tech is the way to play it, because it’s resistant to currency fluctuation,” said Shah.

Merger and acquisition deals in the Asia (ex-Japan) region support Shah’s view. According to an Ernst & Young report released Tuesday, the volume and value growth of deals in this region surpassed global averages in 2011. The spike in restructuring was reported as “preparation for strategic growth in social, mobile, and cloud computing.”

Coincidentally, two of Shah’s top stock picks are located in Asia, the first of which is computer services firmInfosys, based in India.

“It’s the backbone of innovation for big tech stories in the U.S.,” he said, noting that its “B2B” — business to business, as opposed to consumer — model is boosting the company’s growth prospects worldwide.
Shah also recommends Taiwan Semiconductor Manufacturing, based in China.

“It will get a lot of growth out of the tablet, and smartphone demand,” said Shah.

Lastly, Shah likes Internet giant Baidu. Its size, with a market capof $49 billion, is large enough to ease concerns that it exists outside the purview of U.S. regulators.

“They have a lot more pressure to make sure reporting and governance are on par with U.S. companies,” he said, while noting that Baidu has 80 percent of the market share in China.

Shah says it also has more room to grow.

“Absolutely. You have to buy Baidu, if you’re a tech investor in the global market,” he said.

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Disclosures:

Ron Shah personally owns shares in Infosys. But neither Shah, nor his company own shares in Taiwan Semiconductor Manufacturing or Baidu.

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