Investors seeking the biggest growth opportunities have focused almost obsessively on a small number of big, mature U.S.-based tech giants such as Apple Inc. (AAPL), Inc. (AMZN) and Facebook Inc. (FB). However, fund manager Kevin T. Carter is advising investors look at tech companies based in China, India and other markets and serve the 85% of the world's consumers who will fuel the next internet boom, according to a recent interview with Barron's.

Carter manages the Emerging Markets Internet & Ecommerce ETF (EMQQ​), which has delivered a total return of 57% for the year-to-date through Sept. 25, according to Morningstar Inc. That's more than double the 27% total return on the benchmark iShares MSCI Emerging Markets ETF (EEM), also per Morningstar.

Internet Leaders

Among the stocks recommended by Carter are these Chinese companies: online merchants Alibaba Group Holding Ltd. (BABA) and Inc. (JD); social networking, payments, and online entertainment provider Tencent Holdings Ltd. (TCEHY); and online classified ads and business listings platform Inc. (WUBA). Other picks that he discussed with Barron's are: Indian online classified ads listing service Info Edge Ltd. (53277.Bombay); Indian travel services company MakeMyTrip Ltd. (MMYT); South African publishing, internet, and video entertainment company Naspers Ltd. (NPN.South Africa); and e-commerce platform MercadoLibre Inc. (MELI), based in Argentina but with operations also in Mexico, Brazil, Venezuela and elsewhere in the Americas.

40% Growth Rates

As Carter indicated to Barron's, his fund focuses on investment opportunities in emerging markets. Not only do these countries include 85% of the world's population, but internet usage is booming, the direct result of rapidly growing availability of smartphones and WiFi. Moreover, billions of people in these markets are enjoying higher incomes and better standards of living. "McKinsey calls this the greatest growth opportunity in the history of capitalism," Carter told Barron's, citing the respected strategy consulting firm McKinsey & Co.

Carter says that he is a value investor. While the average P/E ratio for his portfolio is a pricey 38, he adds that revenue for these companies has been growing at a torrid 40% compound annual rate. He finds this overall portfolio P/E to growth ratio (PEG) of under 1 to be very attractive, and expects that expansion of profit margins, along with high revenue growth rates, will result in yet higher valuations. He also notes that many companies in his portfolio are backed by western investors with long investment horizons.

Alibaba's Growth

Regarding Alibaba, Carter likes its low PEG ratio of only 0.6. By contrast, he says, shares of U.S.-based rival rocketed upwards by about 1,000% during a decade of little or no earnings. A seemingly insatiable appetite for online buying in China gives him confidence in the continued growth potential for Alibaba,, and Tencent. Additionally, Carter sees opportunities for these companies in online financial services, given the limitations of the Chinese banking system, with its legacy of state control.

Alibaba has posted revenue growth of 56% and profit growth of almost 100% in the latest quarter, Carter says, adding that it also has over 100 investments in major companies. is buying up physical retailers to extend its reach, and he expects it to become the biggest user of drones for merchandise delivery in China, which will improve its market share in rural China. A partnership with Wal-Mart Stores Inc. (WMT) appears to be paying off. (For more, see also: Why Amazon Is Losing to and Wal-Mart.)

China's Craigslist

Carter describes as China's answer to Craigslist. He finds much to be impressed by: the leading share of local listings in 300 Chinese cities; 50% annual revenue growth; and a 91% profit margin. Tencent, he notes, is a significant minority shareholder.

Info Edge and MakeMyTrip should benefit from rapidly-expanding internet availability and usage in India. Smartphone penetration has a long way to go, Carter indicates: only 150 million smartphones among a population of 1.3 billion. In his view, "India has the biggest growth story inside of this growth story," as quoted by Barron's. Tencent and South Africa's Naspers, meanwhile, are investors in Flipkart, a private company that is India's e-commerce leader, he says. Mercado Libre is the e-commerce market share leader in Latin America, where GDP per capita is higher than in Asia and growing at a solid pace, Carter indicates.