Emerging markets still offer growth opportunities
Emerging markets will provide areas of growth for investors as developed markets rebound but should not be regarded as a homogenous sector according to Lazard Asset Management.
Lazard portfolio manager and analyst Rohit Chopra said that emerging markets still had value to offer it would be lower than in the past and would remain so while developed markets such as the US and Europe were working through periods of muted growth.
Chopra said emerging markets growth would be between three per cent and seven per cent, down from 10 per cent seen in 2007, but still outperforming some sectors of the developed markets.
He warned against purely relying on indices to gauge market performance stating they were backward looking and offered no indication of the forward composition of emerging markets which would be based on what was profitable and what was mispriced and offered investments opportunities.
Responding to questions as to why Australian investors should consider global emerging markets when the Asia-Pacific region has more than 20 countries in which to invest Chopra said it was difficult to take a top down view of the region given the variations between the individual countries in the region.
He said that as a bottom up stock picker Lazard saw huge opportunities in the region but had to focus on specifics in choosing investments.
Using China as an example he said that growth there may lead to a flow on effect in another unrelated market elsewhere in the world which had to be assessed on its merits.
He also stated that decreasing oil prices would not affect each emerging market equally and oil producing markets would be hit harder than oil consuming markets which would benefit from lower oil prices.
AUTHOR
Jason Spits
Recommended for you
Some 42 per cent of CEOs say they are actively reinventing their business to stay relevant in the next decade, with consumer services the most common choice for asset and wealth managers.
Former Ophir Asset Management chief executive, George Chirakis, has joined private equity manager Scarcity Partners, while the asset manager has appointed a replacement from Macquarie.
Australian Unity has appointed a fund manager for its Healthcare Property Trust, joining from Centuria Healthcare, as it restructures the product with a series of senior appointments.
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
