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The global economic slowdown will benefit the Far East and emerging markets in the long run, according to Investment Manager Selection.

Paul Kim, portfolio director responsible for managing its active, cautious and balanced fund of funds on behalf of life giant Norwich Union, warned a shift in weighting of investments from the west to Asia and emerging markets was an inevitable trend but current circumstances are likely to speed up the process.

He said: “Not only is it an immediate problem for western markets but it is enhancing a long term one which is going to continue. These economies are still developing. Huge amounts of infrastructure is being put in place and I see that continuing. These things are still happening, still going on.

“There is more bad news for western markets to come. The rights issues we have seen in the UK are an indication that banking shares are not coming up any time soon. We have seen how they have been greeted by investors. There is more bad news to come on the banking and financial front for the US. In the short term this will not do stock markets a lot of good.”

He added his team was planning to “remain cautious” for “well into next year” and his funds were currently underweight in Europe and the US and overweight in Asia and emerging markets.