This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Investors May See Upside Down Under

Stocks in this article: CNZLX ENZ EWA

BOSTON ( TheStreet) -- Beyond the vegemite sandwiches and koala bears of Australia lie unique investment opportunities, according to Robert Scharar, fund manager of the Commonwealth Australia/New Zealand Fund (CNZLX). Last year the fund was ranked No. 1 by Lipper in assessing a 15-year period.

Australia and its neighbor, New Zealand, benefit not just from being commodity rich, but in being stable democracies that can handle the commodities responsibly, Scharar says, pointing to how Australia handled its global-headline-making parliamentary impasse in selecting a prime minister -- itself brought on by a controversial proposal for a 30% tax on coal and iron ore profits. The result: compromise that hasn't affected a growing role as energy giant.

In addition to being one of the first countries to emerge from the global financial crisis, Australia has mineral wealth and a proximity to China that is stoking strong economic expansion. An illustration of both strengths is found in the largest single company-to-company contract in its history, which calls for China National Offshore Oil to buy 3.6 million tons of liquefied natural gas per year for 20 years from Australia's BG Group.

Government officials are announcing boldly that massive undersea fields could quadruple Australia's exports, turning it into an energy superpower.

The Commonwealth fund is alone in focusing exclusively on both lower Pacific Rim countries. On Sept. 2, BlackRock (BLK) announced the launch of the iShares MSCI New Zealand Investable Market Index Fund (ENZ), the first ETF focused solely on the New Zealand market and a complement to the iShares MSCI Australia Index Fund (EWA). In March, IndexIQ launched the IQ Australia Small Cap ETF (KROO).

Scharar says his bullish attitude for Australia and New Zealand comes as much from on-the-ground observations as from any spreadsheet calculation. His frequent trips have enabled him to seek out a variety of small- and midcap companies poised for success. Overall, he sees the countries as safe havens amid the economic uncertainty still rooted in the U.S. and other nations.

"The economy is in this sort of push-pull between inflation and deflation, and I think Australia and New Zealand are particularly well-positioned to offer an investor some upside to all of that," he says.

The commodities market, and the demand for raw resources, is key for both countries.

Food demand will continue to rise, he says, and infrastructure projects will require steel, concrete and other natural resources. Energy resources will continue to be a longstanding and lucrative export.

"I think New Zealand will be in a position to benefit from increased food commodity prices fairly dramatically, just like Australia will from the increased prices for resources," he says. "Australians are also pretty smart about how they are doing that. They are not turning over their assets to everybody in the world. They are partnering up with people in ways that they can maintain control and transparency."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs