The reason for their interest? 45% cited undervaluation in emerging markets, while 35% looked to a belief in the long-term secular growth story.
While our small-scale surveys are clearly not to be taken as gospel on the sentiment of the wealth manager community as a whole, it is clear where investors are looking for a bargain.
The China-led equity market sell-off in August – and its ‘Black Monday’ on 24th of that month when the Shanghai Composite index lost close to 9%, its biggest one-day drop since 2007 – is obviously a huge factor behind the change of views.
39% of our delegates today said they see Asia as the region offering most value – though investors still clearly favour global emerging market funds (86%) for their exposure rather than single-country funds.
“The years since the global financial crisis have proved challenging for GEM equity markets, which have suffered a period of extended underperformance, but valuations now appear cheap on both an absolute and relative basis,” says Caspar Rock, chief investment officer at Architas.
“So where to look for investment opportunities? As more idiosyncratic developments materialise in emerging markets, we are in an environment in which it is increasingly difficult to make generalisations. Consequently, we feel it is of ever greater importance to differentiate between countries and regions and be selective in exposure as far as possible.”
Keeping with trend, Rock too has a preference for emerging Asia, a region that is benefitting from its status as an energy importer, and where the growth element is much more visible.
