With developed economies in the U.S. and Western Europe still struggling to recapture their pre-recession growth trajectories, many smart money managers are finding stronger returns in emerging markets. The companies that follow are among the largest holdings in top-performing emerging market mutual funds and exchange-traded funds, as ranked by Morningstar and Standard & Poor's.
This Chinese energy giant has a $96 billion market cap and recently moved into the U.S. by acquiring a one-third stake in Chesapeake Energy's oil shale project in Texas for $1.8 billion in October. The popular Oppenheimer Developing Markets Fund and the Vanguard Emerging Markets Stock Index ETF, the top two most popular emerging markets funds this year according to S&P, both have the company in the top 5% of their asset portfolios.
Petrobas Petroleo Brasil
The Brazilian oil company says it could the largest oil producer in a decade after announcing quarterly profits of $5 billion this month (see "Petrobras CFO: We'll be Bigger Than Exxon by 2020". A host of mutual funds have the company in the top 5% of their asset holdings, including Vanguard Emerging Markets Stock Index ETF, Oppenheimer Developing Markets Fund and the iShares MSCI BRIC Index Fund.
The Brazilian metals and mining company appears in numerous mutual funds with returns of 15% or higher. This large company with a $167 billion market cap is popular in emerging markets funds, appearing in the Delaware Emerging Markets Fund, which has a 10-year return of 18.2%, and the even better performing BlackRock Latin America fund, which has a 21% 10-year return.
This Hong Kong-based investment holding company and telecom provider commands a marketplace in mainland China and has a $202 billion market cap. It appears in the largest asset investments of iShares MSCI BRIC Index Fund, the Aberdeen China Opportunities and the Delaware Emerging Markets Fund.
Gazprom OAO ADR
This Russian energy company produces and supplies heat and electrical power and is found in a number of funds that promise exposure to Russia's growing economy, including the highly-ranked iShares MSCI BRIC Index Fund.
Brazilian bank that provides commercial and investment banking services and that operates 3,936 branches in Brazil and internationally. It is held in the DFA Emerging Markets Core, which has returned 16.3% in five years, and in the BlackRock Latin America fund.
India's largest private-sector companyReliance controls businesses in energy and materials production, including gas and oil exploration. It makes up 3.25% of the assets held currently in the iShares MSCI BRIC Index Fund.