IFAs see EM as the best bet for next 12 months – Baring AM

Added 18th July 2016

IFAs see emerging market equities as the best investment opportunity over the next 12 months, according to a study by Baring Asset Management.

IFAs see EM as the best bet for next 12 months – Baring AM

The latest IFA Barometer from Baring AM found that a third of IFAs are favourable towards emerging market equities at the moment, while around a fifth (18%) are looking to increase client exposure to the emerging market equity asset class.

“Emerging markets have become much more interesting again and we firmly believe that emerging markets should be a core holding in a risk-adjusted portfolio,” said Simon Jagger, head of UK wholesale distribution, Baring Asset Management.

Baring AM’s holdings in emerging markets funds include Taiwan Semiconductor, Alibaba and Yandex.

“We see significant buying opportunities across the emerging market landscape, with our focus on well-run, strong companies that exhibit excellent growth fundamentals,” he added.

Half of financial advisers put emerging market equities as their first choice for the next 12 months, compared to 41% for UK equities and 25% for US equities.

“With a degree of nervousness globally, we think that the Federal Reserve will be more dovish, which will be good for a stable US dollar and, in our view, good for emerging markets,” noted Jagger. “Significant numbers of financial advisers are clearly recognising the attractions of emerging market equities in terms of growth opportunities and we expect to see demand increase across the rest of 2016,” he continued.

Some degree of caution and uncertainty remains however, because while 18% of respondents are actively looking to increase client exposure to emerging market equities, the research showed a corresponding 21% for absolute return funds, 29% for developed market equities and 30% for multi asset growth funds.

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