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Mobius hot on Hong Kong
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November 15, 1996: 1:35 p.m. ET
Templeton's emerging-markets chief says surging Dow has limits
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NEW YORK (CNNfn) - To Templeton Group's Mark Mobius, the Dow industrials' latest jump backs his argument that investors need to spread their money outside of the United States.
"I'm more bullish about emerging markets because we know the emerging markets are growing at double the rate of the developing nations. This is reflective in the stock market eventually," said Mobius, head of the Templeton Emerging Market Fund.
Appearing Friday on CNN's Business Day, Mobius noted that "of course you have down years (in overseas markets), but in the long run, you are better off having diversified in those markets."
Many experts see the Templeton Emerging Market Fund as one of the safest ways to capitalize on volatile overseas markets.
Mobius' fund has returned an average of 13 percent annually over the last five years.
However, the investment vehicle has lagged behind U.S. stock funds this year, returning just 3.8 percent to the Dow Jones industrial average's 23.37 percent.
Topping Mobius' list of promising markets is Hong Kong.
He picked that market two years ago, and Hong Kong has since soared, hitting a new all-time high on Thursday.
Mobius said Hong Kong is likely to continue its phenomenal run even after July 1997, when the British colony reverts to Chinese rule.
He said Chinese investors could pump money into Hong Kong, as they already do in Taiwan. (357K WAV) or (357K AIFF)
Mobius is also optimistic about Brazil, Mexico and Argentina.
"We think Latin America is going to be very good going forward," he said. "Things have really changed because of the change in philosophy from centralized state-run economies to market economies. That is the change of the future."
Mobius is also becoming interested in Africa's emerging gem, Zimbabwe, a country that could benefit from political change in neighboring South Africa.
For U.S. investors, this argument for emerging markets might seem ill-timed. After all, Wall Street looks to have no downside, with recent corrections turning into buying opportunities that quickly flourish.
But Mobius warns that investors should not become locked into the domestic market.
"Markets are up and markets are down," he said, "and usually a bull market is followed by a bear market." 
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