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Taking on the debts of some emerging markets is less risky than currently investing in the US or Europe, according to Dr Jerome Booth, head of research for Ashmore.

His claim comes six months after Ashmore Global Opportunities Limited which is listed on the London Stock Exchange and is available for retail investors.

The fund draws on the £11.4bn Ashmore has invested in local currency debt and special situations exposure in more than 60 countries around the world. The dollar debt investments made have so far had annualised returns of 19.27 per cent.

Dr Booth described emerging sovereign debt as being split into a majority of countries that were stable, and could not be thought of as "credit markets", but "rather a collection of non-G7 sovereign bonds with sound fundamentals".

The fund acquired 40 per cent of South American country Uruguay's dollar debt several years ago and has also taken on debts from other South American, some Asian and some African nations.

He said: "Uruguay has a perfect repayment record and for many purposes would be regarded as the Switzerland of the south. The only problem is it’s in the wrong neighbourhood.

"But at the end of the day there is more of a chance of Silvio Berlusconi opting Italy out of the euro and introducing the new lira than there is of Uruguay or Brazil defaulting on its debt."

Dr Booth advised any pension investment fund looking for strong growth to consider investing 35 per cent of their capital into emerging markets, and said private banking clients should be staking even more.

He said: "The US and European credit markets are extremely risky at the moment because of the lack of liquidity.

"All the growth and all the liquidity is with emerging countries. In 15 years time we are predicting about 50 per cent of world GDP will be coming from Asia, Africa and South America."

Dr Booth added that worldwide inflation was one of the biggest risks facing investors, and there was a 20 per cent risk of the US dollar losing up to 30 per cent of its value in the next six months, if some emerging markets including Gulf countries and China or even Japan suddenly decided to appreciate its currency.

If what Dr Booth termed "his ugly situation" occurred, he said the global credit crunch would deepen into recession.

He said: "There will be a need at some point for Gulf countries to appreciate its currency because of inflation."