Key points

• The global middle-class will have 4.9 billion people by 2030, from 1.8 billion in 2009, predicts the OECD. Two-thirds of the new middle-class is expected to be Asian.
• Investors can gain access to this megatrend via ETFs over the Hong Kong stock index, or consumer ETFs like the iShares Global Consumer Staples ETF.
• When it comes to direct stocks, investors should consider producers of luxury brand goods and vehicles like German carmakers BMW Group and Volkswagen AG.

The coming boom in Asian middle-class consumption could be the most promising megatrend of them all – and a critical consideration for long-term investors.

The promise comes from billions of consumers who are expected to join the middle-class and buy foodstuffs, products and services that Australians take for granted.

The global middle-class will have 4.9 billion people by 2030, from 1.8 billion in 2009, predicts the OECD. Two-thirds of the new middle-class is expected to be Asian. That roughly equates to another 2 billion Asian middle-class consumers on Australia’s doorstep within 15 years.

The figures are breathtaking: about 133 million people in Asia on average joining the middle-class each year over the next 15 years – or almost six times the Australian population each year.

Then add the critical accompanying trend – “hyperconnectivity”. As internet penetration rapidly increases in Asia and smartphone ownership booms, billions of middle-class Asian consumers, many of whom are well-educated, will be able to connect to Western companies and markets online.

Smartphone subscriptions are expected to rise to 6.1 billion by 2020, from 2.6 billion, forecasts Ericsson.

Self managed superannuation funds (SMSF) should find ways to lift exposure to a trend that will roll on for decades and position portfolios for the mother of all investment megatrends. Here are four ways to play the Asian middle-class boom.

1. Hong Kong

Commentators usually focus on growth markets within Asia, such as dairy consumption. Another strategy is focusing on markets outside Asia that will benefit from huge capital inflows and the region’s middle and upper classes putting more funds to work.

This trend is alive and well in the Sydney and Melbourne property markets, amid reports of sharply higher demand from Asian investors for our property. What happens when trillions of dollars of that capital starts to flow to offshore equity markets?

Hong Kong looks a natural beneficiary: a go-to market for wealthy Chinese investors and others in the region. The Shanghai-Hong Kong Stock Connect, an investment channel that launched late last year, should help drive demand for Hong Kong equities in the next few years.

After soaring since 2012, Hong Kong’s Hang Seng Index is down almost 10% from its peak, amid broader weakness in China’s Shanghai Composite Index.

Chartists will look for the Hang Seng index to test price support just below 25,000 points, from 26,084 now – and provide a better entry point for buyers. An ETF over the Hang Seng Index is the easiest way to gain exposure to Hong Kong equities.

2. Consumer staple stocks

The Asian middle-class boom will, in time, boost demand for healthcare and other services. The best way now to play the trend is through food consumption, as rising daily disposable income is felt fastest through diet upgrades.

To be sure, healthcare in Asia has cracking long-term prospects, but huge infrastructure across the region needs to be built to facilitate rapid growth. The same goes for wealth management and many other services in Asia that will benefit later in the middle-class boom as the region develops a stronger regulatory platform and other needed infrastructure.

The iShares Global Consumer Staples Exchange Traded Fund (ASX Code IXI) is a smart way to play the food trend. The ETF seeks to replicate the price and yield performance of an index comprising global equities in the consumer staples sector.

Its biggest exposures are to multinationals such as Nestle, Proctor & Gamble, The Coca-Cola Company and Pepsico Inc. About 57% of the index is in food, beverage and tobacco stocks; 21% is in food and staples retailing; and 20% in household and personal items. Many companies in the index are household names with a growing Asian presence.

The iShares Global Consumer Staples ETF returned 25% over the year to June 2015 and has a five-year average annualised return of almost 16%. A lower Australian dollar boosted returns (the ETF is unhedged for currency movements), and gains should be slower from here. But this ETF has good long-term prospects as Asian demand for consumer staples rises.

3. Western multinationals with a growing presence in Asia

Some argue the best risk/reward trade-off in Asia is found through US and, to a lesser extent, European multinationals that have a growing presence in the region.

I am not entirely convinced: the likes of Tesco, McDonald’s, Walmart, Yum! Brands and several other prominent western multinationals have struggled over the years to achieve consistently strong growth in Asia – and overestimated their ability to understand Asian preferences, market structures and competition.

Nevertheless, owning a diversified portfolio of western multinational companies is a lower-risk strategy to play the Asian middle-class boom. Investors will not get the same upside, principally because US and European multinationals still mostly earn the bulk of their revenue in developed rather than emerging markets. Also, they can come with significant currency complications.

I prefer the iShares Global 100 ETF (ASX Code IOO) for exposure to US and European multinationals. The ASX-listed ETF seeks to replicate an index that counts Apple Inc as its largest exposure (7.5%), followed by Microsoft Corp, Exxon Mobil Corp, Johnson & Johnson and General Electric.

It has returned 30% over one year to June 2015 and 13% annualised over five years. Although there are better ways to gain more precise exposure to the Asian middle-class, lifting portfolio exposure to the world’s best companies, which have the brands and balance sheets to make even bigger inroads in the region – or buy those that do – has merit.

4. Direct stocks

Investors who want exposure to global companies well-placed in Asia should consider German car makers BMW Group and Volkswagen AG, or providers of branded fashion goods to wealthier Asian consumers, such as the Prada Group.

US and European cruise-line stocks, such as Royal Caribbean International, that are superbly placed to benefit from stronger Asian demand for travel, also appeal.

Perhaps the most intriguing option is buying the Asian equivalents of US and European multinationals – the next Cola Colas, Wal-Marts or McDonalds that emerge from Asia.

Well-performing listed investment company PM Capital Asian Opportunities Fund has holdings in 51job Inc, a Chinese internet company; Tingyi Holding Corp, a large maker of instant noodles and soft drinks in China; and Malaysian beer makers Guinness Anchor and Carlsberg Brewery Malaysia.

Buying rapidly emerging Asian companies that are, arguably, better placed to capitalise on their boom than their western counterparts has plenty of merit, but is a difficult strategy to implement and monitor for Australian investors.

A better option is buying an actively managed fund, such as the PM Capital Asian Opportunities Fund or other well-regarded Australian fund managers that focus on Asia, and letting them do the hard work to earn their fees.

• Tony Featherstone is a former managing editor of BRW and Shares magazines.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.