Globally it's a basic proposition

Published on Friday 18 April 2008 21:22

AN IMPORTANT part of my job is getting face to face with fund managers – the guys who run the money. This week I had the privilege of meeting one of the real talents available to investors, Graham French of M&G.

French manages the M&G Global Basics fund, which focuses on investing in companies driving worldwide economic growth.

Unlike many fund managers, French has a strong record of identifying fundamental trends and anomalies which can dramatically impact on the fortunes of a company.

The phenomenal demand for raw materials in emerging countries in now well understood, and is set to continue due to increasing industrialisation.

In these same countries, particularly China and India, many people still do not have access to basic consumer products which we in the West take for granted. Therefore, accurate identification of companies which can meet the growing demand from consumers will offer French's fund exceptional opportunities going forward.

Over the next 25 years, 250 million people are set to move to China's urban areas. Such migration is creating a significant "middle class". It is worth pointing out that China is by no means unique, and several Asian economies, plus eastern European and Latin American countries, are also experiencing rapid economic growth, which in turn increases their demand for basic and secondary materials.

So to my mind, this fund offers a tremendous opportunity for investors to gain exposure to the real growth stories, as we witness the dramatic shift in global economic power. The combination of an experienced and talented fund manager, and exposure to worldwide economic growth suggest what might have been traditionally viewed as a fund which could add "spice" to a portfolio should increasingly be seen as a core holding for growth investors.

&#149 Ken Taylor is director of Mackenzie Taylor Wealth Management.