The transition from ‘old economy’ stocks to ‘new economy’ names like Alibaba (BABA) and Mercadolibre (MELI) has many more years to run, said Clem Miller, portfolio manager for the Wilmington Multi-Manager International Fund (GVIEX). So-called new economy stocks provide services or produce light-weight high-tech products, according to Miller. As a result, he said they are much less vulnerable to commodity price and currency volatility. Furthermore, Miller suggested that since these firms were founded by entrepreneurs, they are therefore less exposed to government interferences and will likely deliver more steady earnings streams than their old economy counterparts. ‘The story behind Alibaba and Mercadolibre is that they are servicing the new rising consumer middle class in emerging markets,’ said Miller.
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