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Mark Mobius: What to Look for in a Country When Investing

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Jun. 7 2016, Updated 1:02 p.m. ET

Investment strategies

Mark Mobius spoke at the SALT Conference. He’s the emerging markets fund manager at Franklin Templeton Investments. He said that there’s huge potential in emerging markets (EEM) (EDC) (VWO). He also said that when he’s deciding on investments, he looks for three important things in a country. These three things are:

  • Can I get money out of the investment?
  • What’s the government’s tax structure?
  • How’s the currency?

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Getting money out of an investment

Making money from an investment is important. It’s the primary rule of investing. If a country isn’t able to provide returns to investors, then investing in that country won’t be fruitful.

Government’s tax structure

The tax structure is an important aspect of investing. The government should provide a smooth tax structure for businesses. If the government is imposing a tax rate that’s too high and it’s killing businesses in the country, then how will a business provide a good return to investors? The government’s tax structure is an important parameter for investors to consider when making investment decisions.

Looking at the currency

A country’s currency plays a major role in making investment decisions. According to Mobius, a weaker currency is good. For example, if we’re investing in Brazil (EWZ) (BRZU), then a weaker Brazilian real against the US dollar (UUP) will provide more shares in Brazilian companies.

In the next part, we’ll see what Mobius said about the Brazilian economy.

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