Global recovery favours emerging markets
AMP head of strategy and chief economist Shane Oliver says while emerging markets are generally out of investor favour, the asset class is geared to the global economy and is beginning to climb again as global economic confidence grows.
“I think it [emerging markets] started to improve last year out of the September lows in global equities, and as confidence grows Asia may outperform next year,” he says.
And Oliver says the recent devaluing of the currency in Argentina could even assist in a return to popularity for Latin American emerging markets.
“The devaluation of the peso was a crisis in slow motion, but now that it is out of the way the downside to investors, and fear of investing, has lessened somewhat because devaluation reduces the risk,” he says.
The Asian market, particularly Korea, look good to Oliver because Korea is more diversified than Singapore and Hong Kong. He says Eastern Europe remains a mixed bag but usually lags behind the US six months so it should stabilise by the end of the year.
“Everyone’s been quite scared, so you see a retreat to safe havens,” he says.
“Then investors, once confident in their own economy, start to look abroad and see if they can get better returns offshore.”
—Nicole Szollos
Recommended for you
Perpetual has released its Q2 fund flows showing a fall back into outflows after a positive Q1, as well as an update on its planned deal with KKR.
Magellan has announced a raft of executive changes including the departure of head of investments Gerald Stack after 18 years and a second appointment from Maple-Brown Abbott.
Morningstar research of seven active Australian asset managers has found they are expected to see client redemptions averaging 3.1 per cent of their FUM per annum through to FY29, with two forecast to lose more than 10 per cent.
Franklin Templeton is to get rid of its Martin Currie branding and fold them into the wider group under ClearBridge Investments and Franklin Equity Group.
