“It’s a world of diverging markets,” says Rashique Rahman, head of emerging-market debt at fund giant Invesco. “And we can’t paint ’em with a big broad brush.” While former powerhouse markets like Russia and Brazil are straining under falling commodity prices and a stronger U.S. dollar, some of their smaller neighbors are stealing the spotlight (and, yes, even benefiting from cheap oil). Below, three of the best emerging markets to invest in now.
Indonesia
With nearly 253 million people, Indonesia is the most populous country after China, India, and the U.S. Its massive and ascending middle class is consuming so much energy that the Southeast Asian nation now imports more than it exports—making low oil prices a boon. And with the new reform-minded President, Joko Widodo, overhauling the country’s budget and cutting corruption, investors see plenty of upside. Jay Nogueira, associate portfolio manager of T. Rowe Price’s (TROW) $3.9 billion Global Growth Equity strategy, is bullish on Bank Central Asia, “the J.P. Morgan of Indonesia,” as well as Dutch consumer conglomerate Unilever (UN), which has a large Indonesian business.
Mexico
On the U.S.’s southern flank is another country on the reform track—opening up its state-run energy industry to foreign players and ending its notorious telecom monopolies. Lately Mexico has even challenged China’s status as a global manufacturer. Such positive signs were driving up local equity valuations until late 2014, when a broad selloff in emerging markets brought the MSCI Mexico index back to earth. Rick Schmidt, who oversees $8.9 billion in emerging-markets portfolios for Harding Loevner, likes Mexican Coke bottler Femsa, which also owns 20% of Heineken, as well as Grupo Aeroportuario del Sureste, which operates the Cancún airport.
Poland
Though Poland has one of the highest GDP growth forecasts in the European Union—3.3% in 2015, according to the IMF—its markets have recently been hurt by economic troubles all around its borders, from the malaise in Western Europe to warmongering in Russia. That has created buying opportunities for investors who see value in a country undergoing rapid modernization—and that, as a net energy importer, is getting a boost from cheap oil. “Poland is just your classic emerging market. It still has a large rural base, but urbanization continues and people are moving into the middle class,” says Schmidt, who owns Bank Pekao there.
This story is from the February 2015 issue of Fortune.