Attractive valuations, rather than a comment on the economic outlook, have driven Simon Evan-Cook, senior fund manager on the multi-asset team at Premier, to place more capital into emerging markets.
Mr Evan-Cook said: “We have had a fairly high exposure to emerging markets this year, particularly in our more growth focused funds, which have higher weightings in overseas stocks.
"This is because we are value-driven investors, as opposed to macro-driven investors, and valuations in emerging markets look considerably more appealing than many of their developed peers, particularly the US.”
He added that in the £150m Premier Multi-Asset Global Growth fund, 30 per cent of the capital is invested in emerging market equities.
Mr Evan-Cook said this has benefited the performance of the fund this year.
The fund has returned 18 per cent over the past year, compared with 12 per cent for the average fund in the IA Flexible Investment sector in the same time period.
Mr Evan-Cook said he has actually been reducing slightly his exposure to emerging markets as the valuation multiples have risen, but added: “However, we still think emerging markets are trading on a relative discount, so we’re happy to maintain what amounts to a large overweight compared to most global indices and funds.”
The MSCI Emerging Market index has risen 24 per cent in the past year, compared with 17 per cent for the MSCI All Country World index in the same time period.
Jonathan Davis, who runs Jonathan Davis Wealth Management in Hertford, said he has been investing client money into emerging market equities this year partly because those economies have not been distorted by what he considers to be the malign impact of quantitative easing, as developed market equities have.
He is also keen on emerging markets as he believes they will perform well when inflation is on the rise.
david.thorpe@ft.com
