Have advisers appropriately factored emerging markets?
As recent FE Analytics data confirmed, exposure to emerging markets funds would have provided Australian investors with better value than a conventional Australian equities play over the past three years, but was anyone actually paying attention?
Funds that invested the majority of their assets in equities from emerging market countries performed better than the S&P/ ASX 200 index over the past three years to May, 2017, according to Money Management’s analysis based on FE Analytics’ data.
As one of the investment professionals prepared to make a call on the investment outlook for 2018 at Money Management’s Investment Analyst forum http://www.moneymanagement.com.au/events/webinars/analyst-forecast-foru…, Premium China Fund’s executive director, Jonathan Wu reckons it’s not too late for Australian advisers to help their clients adjust their exposures.
“With developed market equities reaching new highs each month leading to extremely stretched valuations, it is now time for asset allocators and investors alike to look to markets which are far more attractive like China and Korea,” he said.
“Most investor have continuously allocated to their US equities exposure but what will happen when the next global correction occurs? Which market will correct more?”
Wu points to the fact that the choices become fairly stark when it recognised the US is sitting at over 16 times price/earnings (P/E) while China and Korea are trading at under nine times P/E.
“Advisers still have time to act with regards to shifting their core global equities exposure to emerging markets and we’ll be discussing how this is possible through a change in mindset, which is what clients want advisers to do in order to add value to their service offering and differentiate themselves from the pack,” Wu said.
Wu will be joining keynote Stephen van Eyk, Perennial’s Brian Thomas and Insight Investment’s Adam Kibble in the 30 January webinar in which each of them have committed to making a call on the investment outlook for 2018 before facing the music about their calls in July.
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