FE Trustnet recently had an article quoting several investing experts, some of whom had sold down their emerging market fund holdings, who offered some worthwhile tips for any investor still considering emerging market investments. Ben Conway, fund manager at Hawksmoor Investment Management, was quoted as saying:
“The thing with emerging market equities is that investors need to be more sophisticated as you can’t generalise anymore. There are so many different economies moving in their own separate ways. In many ways, the easy money has been made…. The fact that we don’t own more of it in the fund is a recognition of the fact that even bottom-up managers, who are picking companies no-matter what is happening on a macro level, are going to struggle.”
Meanwhile, Rob Morgan, pensions and investment analyst at Charles Stanley Direct, had this to say:
“I’m generally of the view of the need to tread carefully. Some areas are attractive but quite expensive like India, others unappealing but very cheap such as Latin America. I also agree that the US dollar headwind could continue for some time and cause many of these markets pain.”
However, he thinks Asia funds look attractive at this point in time but is wary of funds with mainland China exposure.
Finally, the team at Whitechurch Securities was quoted as saying:
“We have pulled back on our emerging market exposure, preferring to increase our position towards Asian equities, particularly with managers who favour Chinese and Indian markets… Most of the major Asian markets are net oil importers, so a lower oil price should prove beneficial to Asian economies whilst if the Chinese implement pro-growth policies in the second quarter this should prove beneficial for the region.”
To read the whole article, Time to sell down emerging markets funds, warn experts, go to the website of FE Trustnet.
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