Emerging Markets

Intermediaries Confident On EM Equities – Barings

Natasha Taghavi Reporter London 19 December 2012

Intermediaries Confident On EM Equities – Barings

More than three in five (61 per cent) of financial advisors believe that their clients should be increasing their exposure to emerging market equities, according to the latest findings from the Barings Investment Barometer.

The survey, which gauges attitudes toward the current economic environment and views on major asset classes, found that only 19 per of advisors were sanguine on emerging market equities back in September.

In the latest study, over half (55 per cent) of financial advisors said they believe their clients should increase their exposure to Asian equities (excluding Japan), a figure up by 14 per cent since September. They also expressed positive views on emerging market debt, with over a quarter (27 per cent), believing that their clients should increase their exposure to the sector, up from 19 per cent three months ago.

“Emerging market and Asian (ex Japan) equities have remained robust in the face of extreme uncertainty. However, there is also a clear shift in sentiment towards emerging market debt and European and US equities, signalling greater interest from financial advisors in diversifying into more asset classes in the pursuit of growth and market opportunities,” said Rod Aldridge, head of UK retail distribution at Barings.

Overall, financial advisors and investment professionals are favourable towards emerging market and Asian (ex Japan) equities. Just under a third of respondents (32 per cent) are “very” favourable toward emerging market equities, up by 7 per cent from September’s reading, while the corresponding figure for Asian (ex Japan) equities was also up by 5 per cent to 32 per cent.

The largest shift in sentiment recorded by the survey was in emerging market debt, which in December 21 per cent of advisors were "very favourable" towards, compared to 12 per cent in September. Meanwhile, the natural resources and commodities asset class rose from 9 per cent to 16 per cent over the same period, and European equities rose from 9 per cent to 18 per cent. US equities hit 31 per cent, rising by 8 per cent between September and December.

In other significant findings, 29 per cent of financial advisors are now “very” favourable on UK equities (up by 6 per cent from September).

However, concerns about UK economic growth remain, with almost a third (31 per cent) of respondents rating stagnant or negative UK GDP as the biggest macroeconomic challenge to investment growth in the next six months.


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