InvestmentsNov 16 2015

Record numbers turning to emerging markets: Barings

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Record numbers turning to emerging markets: Barings

Almost one in five non-retired people say they are likely to consider investing in emerging markets next year as part of their retirement planning, according to Baring Asset Management.

A poll of 1,548 non-retired people found 13 per cent would look to invest in a portfolio that covered all emerging markets, up from 12 per cent in 2014 and 8 per cent in 2013.

A total of 8 per cent said they would likely invest in major economies such as China, India and South Korea, while the same number picked emerging European markets such as Poland.

One in 20 said they would likely look at the South East Asian region, while 4 per cent - double the number form last year’s survey - said they would be likely to look at frontier markets.

However, sentiment towards emerging markets is more positive among younger people polled.

Of those that might invest in emerging markets in the long-term, some 15 per cent of 18 to 24-year-olds said they would be likely to consider investing in a single portfolio that covered all emerging markets, compared to 8 per cent of 55 to 64-year-olds.

Additionally, while 15 per cent of 18 to 24-year-olds would look at Bric economies, this falls to just 1 per cent of pre-retirement 55 to 64-year-olds.

Rod Aldridge, head of EMEA wholesale distribution at Barings, said emerging markets represent a significant number of countries and slice of the global economy.

He said: “Despite uncertainty around some emerging markets, fuelled in part recently by concerns over China’s economy and the impact on regional Asian economies, we believe that the asset class will grow in significance over the long term.”

Daren O’Brien, director at advisory firm Aurora Financial Solutions, confirmed many of his clients were looking for growth opportunities further afield.

“With low UK interest rates and UK markets not achieving much over the last 6-12 months we have seen a growth in client activity in the EM areas.

“Clients are seeming to want to get involved more and make active geographic market choices with switching funds over ever shorter periods to achieve the growth they require.”

Barings’ research comes as the latest Cofunds survey showed almost two thirds of advisers feel optimistic about the UK economy.

The platform said this was followed by the US, favoured by 51 per cent of advisers, while Europe and Asia followed, with 41 and 24 per cent respectively.