TGIF June 27, 2014

The World Cup of Soccer is front and center on the global stage, and Team USA showed up big time. Ranked 13th heading into the tournament, the United States soccer team has turned heads with its strong showing against the global powerhouses from Germany and Portugal. Their inspirational effort reminds us how important sports are at the international level. With so many global issues and problems today, it’s nice to have healthy and friendly athletic competition.Here are a few necessary, and perhaps misunderstood, facts about the game. Outside the US, it’s not soccer; it’s football or futbol. The match is played on a pitch, not a field. Players wear a kit, not a uniform. The footwear are called boots, not cleats or shoes. Only the Goalkeeper can use his hands. Apparently in Uruguay, some use their teeth…Like the Olympics, the World Cup is held every 4 years. Soccer is by far the most popular sport in the world. In 2010, 3.2 billion people around the globe watched the World Cup on television. That’s nearly half the earth’s population! It’s expected to be even more this year. This completely dwarfs the Super Bowl TV audience, which generally comes in around 125 million people worldwide. Not surprisingly, 90% of the Super Bowl audience is in the US. The World Cup is a big deal.

In looking at the top ranked teams in the World Cup, there isn’t necessarily a direct correlation with its economic size and strength. Spain was the #1 seed, but was knocked out early. Spain ranks 14th in the global economy. Both Germany and Brazil stack up well for both soccer as well as economic strength, ranking #5 and #7 in the global economy. They’re the #2 and #3 seed in the World Cup, and still very much alive. Team USA made the next round in a big surprise, and we all know the US is the largest economy in the world. But also alive are Greece, Costa Rica and Uruguay, who rank 79, 85 and 88 in the global economy. Good soccer doesn’t always mean good finances, and vice versa. China, the world’s 2nd largest economy, failed to qualify for the World Cup.

From an investment standpoint, we are finding international markets compelling again, particularly with the DOW and S&P near all-time highs. Growth in Emerging Markets and the rise of the global middle class are themes we always track and are finding attractive again for investment. As host, Brazil has made substantial investments in infrastructure in anticipation of both the World Cup as well as the Olympics in 2016. We see returns on that capital investment growing, and like the prospects for further investment in Brazil as well as other international investments. This is a theme we plan to explore further this year.

Have a great weekend. We’ll be back dark and early on Monday. Go USA!

By Mike Frazier

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