The money to be made is in non-U.S. markets, according to Jeffrey Gundlach. For long-term investors, he recommends a specific ETF.

That ETF is INDA, the iShares fund that tracks the Indian equity market. He singled out India because of the growth of its workforce and its tradition of education and technology.

“It could go up 1,000% in the next 20 years,” Gundlach said, “just like China did.” INDA is up 32% year-to-date and carries an expense ratio of 0.71%.

Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital. He spoke at the Schwab IMPACT conference on November 16. His talk was titled, “2017: At the Home Stretch.”

I’ll go over what he said about the global economy and why he believes emerging markets are a compelling opportunity, along with some “insane” developments in various asset classes.

The global landscape

This has been a very easy year for investors, he said, with no volatility in bonds, although short rates have gone up. The S&P is up 17%, but he said investors would actually have been unlucky to have over-allocated to it, since some of the emerging markets have performed better.

“There is a narrative of a synchronized global expansion,” he said, “which is correct.” Of the 35 OECD and 10 non-OECD countries, most have accelerating growth and the rest are standing still, according to Gundlach. The global manufacturing and service PMIs are in uptrends and at highs for their last 20 months. Real GDP growth in the emerging and developed markets is increasing, he added.

The central issue that characterizes the economic landscape is a contradiction in policy, according to Gundlach, with the European Central Bank (ECB) and the Fed pursuing different monetary policies, despite similar economic conditions.

In Europe and the U.S., he said, GDP growth, inflation, manufacturing and retail sales are the same or better levels as compared to recent prior years. But the Fed is tightening, by raising rates and engaging in quantitative tightening (which he said has been given the more pleasant-sounding name of “normalization”). In Europe, however, there is quantitative easing (QE) and negative interest rates.

Gundlach said that ECB President Mario Draghi “shocked the markets” when he recently said that the ECB would expand its monetary supply by 30 billion euros a month through September of 2018 and stay with QE until rates rise. Gundlach speculated that Draghi, an Italian, did this because he is likely to leave his position at the ECB and be replaced by a German. Italy’s banking system is held together by the ECB’s policies. But Germany has a different perspective, Gundlach said, implying that it might not be as supportive of monetary easing.