The recession has taken a toll on economies around the world, from driving down standards of living to sending unemployment to record levels. Through it all, however, some nations' people have emerged stronger and wealthier than ever before. Is there a trend among the richest countries on the planet, and can investors benefit from these economies' gains?
Compiled from data from the International Monetary Fund's 2013 estimates, here are the richest five nations among the world's 50 largest economies, sorted by GDP per capita and adjusted for purchasing-power parity. While at least one expected name makes the list, a few may surprise you.
No. 5: Switzerland, $46,474 per person
Kicking off the list is Europe's second-wealthiest country, Switzerland. The Swiss economy has performed remarkably well despite its proximity to recession-battered European nations. Switzerland's GDP grew 3% in 2010 and an estimated 0.9% in 2012. Those aren't eye-popping numbers, but compared to Europe's far-reaching contraction, it's a relieving dose of stability. Swiss citizens have gained from the country's notoriety as a tax haven, and the country's forward-looking moves -- such as its preliminary agreement to a free-trade deal with China -- should only benefit its economy in coming years. The IMF expects Switzerland's GDP per capita to rise to more than $54,000 by 2018.
Investors can get in on the country's good fortune as well. Swiss drugmaker Novartis (NYSE: NVS ) has been a standout stock among big pharmas, with shares gaining more than 45% over the past year. Novartis' future is bright with drugs such as its oral multiple-sclerosis medication Gilenya, which analysts have pegged to gain peak sales of between $2 billion and $3.5 billion. Among Swiss stocks, Nestle (NASDAQOTH: NSRGY ) , which has seen its shares gain 20% over the past year, is poised to become a leader among the growing infant-nutrition business. Infant nutrition has risen especially sharply in emerging markets such as China, and Nestle's one of the top players poised to capitalize. Investors have plenty to pick from in this wealthy nation.
No. 4: United Arab Emirates, $49,883 per person
A few Middle Eastern nations have profited in a big way from the region's oil bounty, but few have done so as successfully -- and as publicly -- as the UAE. Dubai, the country's largest city, has exploded into a desert metropolis as the nation's citizens have enjoyed top-tier gains in standards of living. The nation's still in the middle of developing, with tourism playing an important role in the country's economic growth. Foreign investment has also supercharged the country's economy, with more than $10 billion in foreign investment entering the country in 2011. The IMF's estimates are optimistic: The organization expects the UAE's GDP per capita to grow to more than $57,000 by 2018.
The nation's rise has been a boon for the country's markets, which recently hit multiyear highs. While investing in this rising star isn't so easy as investing in an established nation such as Switzerland, Middle East ETFs such as the Market Vectors Gulf States Index ETF (NYSEMKT: MES ) offer exposure to the brightest growth story in the region. Almost 30% of this ETF's exposure is concentrated in the UAE, the second-leading nation in the ETF and trailing only Kuwait.
No. 3: United States, $51,248 per person
I think most investors will recognize this nation. For all the hits the U.S. economy has taken throughout its slow recovery from the depths of the recession, the average American still lives a remarkably wealthy lifestyle. Falling unemployment, which declined to 7.5% recently, and the country's housing rebound have helped America dig out of the economic doldrums. The IMF expects good things ahead for the U.S., predicting a per-capita GDP of more than $63,000 by 2018. While challenges remain for the U.S., the country's GDP continues on an upward track despite the recent tax increases and implementation of sequestration.
If you're looking to take advantage of the U.S.' economic growth, look no further than the housing recovery. Home improvement retailers such as Home Depot (NYSE: HD ) and Lowe's (NYSE: LOW ) are at the center of this trend. Home Depot has done well by growing its profit and return on equity, and it grew sales by 14% in its most recent quarterly report -- although the stock's run-up of 63% over the last year gives pause. Lowe's smaller size has slowed the company down in relation to Home Depot, and while the stock has done well in gaining more than 50% over the past year, Lowe's will need to pick up same-store sales growth to match Home Depot. Still, both stocks look poised to capitalize on the American economy's resurgent growth.
No. 2: Norway, $56,663 per person
At No. 2, Norway is Europe's wealthiest nation. Like Switzerland, this economy has remained remarkably stable throughout Europe's debt crisis. Norway's GDP grew by 0.7% in 2013's first quarter as the nation's oil resources powered the country's wealth. While some Norwegian experts have warned that the country's dependence on oil and energy could hurt its future, Norway's doing well right now: Projections peg the country's mainland economy to grow by 2.75% this year.
The IMF's certainly bullish, projecting Norway's GDP per capita to grow to nearly $66,000 in 2018, maintaining its lead over the U.S. While Norwegian companies are hard to find on American stock exchanges, one low-risk way to gain Norwegian exposure is to buy shares in the main Big Oil firms. BP (NYSE: BP ) and many of its competitors engage in exploration and drilling in the North Sea. Out of all the oil majors, however, BP may be the one stock to avoid in Norway: A government agency pushed a safety review on the company in late April following a leak at one of BP's North Sea fields last September. For now, expect this company to remain closely watched in Norway.
No. 1: Singapore, $61,567 per person
The wealthiest nation in the world's top 50 economies has been one of the hottest growth stories in recent years. Singapore's emergence as a business hub and tax haven -- research firm WealthInsight predicts that the country will surpass Switzerland as the world's largest offshore wealth hub by 2020 -- has been a boon for its population's standard of living. Foreign investment has poured into the nation, turning Singapore into Southeast Asia's pre-eminent economy. The country is expected to gain even more in the next few years, with the IMF expecting Singapore's GDP per capita to rise to an astounding $77,000 by 2018.
The iShares MSCI Singapore Index Fund (NYSEMKT: EWS ) has performed well alongside the country's growth, gaining more than 22% over the past year. The ETF is weighted heavily toward finance and real estate, with more than half of its assets in those two sectors. While the Singapore ETF will likely continue to rise with the nation's economy, don't expect rapid gains from an index fund like this.
A global economy on the upswing
As the world claws out of the depths of the 2008 recession, standards of living are poised to continue increasing around the globe. That's good for the world's population and investors alike as stocks take advantage of this new wave of growth. This is the kind of growth everyone has a stake in.
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