Top Fund Manager Says Brazil, China Still Have Edge

Stock quotes in this article: SCIEX , SYT , HMC , TEVA  

NEW YORK (TheStreet) -- Virginie Maisonneuve, co-manager of the Schroder International Alpha Fund(SCIEX), says companies with strong positions in China and Brazil will outshine their peers.

The mutual fund has risen 38% this year, better than 94% of its Morningstar peers. Over the past five years, the Schroder International Alpha Fund has returned an annual average of 7.3%, beating 79% of its rivals.

Welcome to TheStreet.com's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.

Are you bullish or bearish?

Maisonneuve: On a medium-term basis, I am bullish on quality growth at a reasonable price. I like globally competitive and attractively priced companies offering superior medium- to long-term earnings growth.

In the shorter term, the investment environment is clearly being driven by governments' efforts to curtail the financial crisis. They are injecting massive amounts of liquidity through various support programs. This liquidity, given low interest rates, is also supporting equity markets. It is also accelerating some of the global structural shifts already under way, such as the one related to the increased share of emerging economies in global growth. Most emerging-market economies entered the crisis in better financial shape than their developed counterparts. In particular, countries such as China or Brazil. Global competitive forces, particularly from Asia, and weaker global demand in some key industries with ample capacity, will continue to increase pressure on marginal returns. This provides an earnings opportunity for quality global companies with the right products or services that can be lean and have good access to capital.

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