Published: August 12, 2010
Financial advisers prefer emerging market investments.
Emerging markets are the most favoured asset classes of financial advisers, according to a survey conducted by Baring Asset Management.
Of those questioned, 42% are positive towards investing in emerging markets just ahead of Asia (excluding Japan) with a 39% approval rating.
The results show that two-thirds (66%) believe their clients should increase their exposure to emerging markets with only 9% saying it should be reduced. A quarter wants their allocation to stay the same.
“Our fund managers believe we are near the optimum point in the economic cycle for emerging market equity investing,” says Barings’ Ian Pascal, “so it is good to see that financial advisers are tuned into this and believe their clients should be increasing their exposure.”
Barings believes that increased earnings estimates in emerging markets have been driven by the recovery in the global economy coupled with continued low interest rates in developed markets.
But half (48%) of the financial advisers surveyed are concerned about current market volatility and encourage greater diversification of assets with a quarter advising investing in multi-asset products.
According to the survey, the asset class most well known to financial advisers are UK equities (92%) while 89% are familiar with emerging markets.