Emerging Markets 

Growth in emerging markets expected

Growth in emerging markets expected

Four out of 10 investors expect Asian stock markets to improve over the next six months, according to a survey by Willis Owen.

The poll of almost 1,000 UK retail investors found a similar proportion of investors maintain a positive view on emerging markets as a whole, with 38 per cent considering it as a positive option.

Just 17 per cent or respondents thought the Asian market would experience a fall, with 15 per cent believing emerging markets as a whole will tumble.

Positivity extends to the US market as well, with 41 per cent of those surveyed predicting a swell between now and April 2019. Conversely 27 per cent expect a fall in US investments.

The solid base of support for emerging markets is not matched by investors’ predictions about the prospects of more developed regions.

More than half of all those spoken to expect the UK stock market to decline further in the next six months, while just one in four anticipates a rise.

When it comes to European stocks, 41 per cent expect an increase, while 21 per cent predict a fall.

Japan, however, is viewed more favourably, with 33 per cent of investors expecting the stock market to rise, while just 16 per cent envisage a fall between now and April 2019.

Adrian Lowcock, head of personal investing at Willis Owen, said: “Despite UK retail investors having a negative view on the UK and European markets, many clearly feel that the US bull market still has some way to run, and that the fall in emerging markets and Asia may have reached their lowest level and could see some sort of recovery over the next six months."

Willis Owen identified two emerging funds it considers worthy of note.

The Fidelity Emerging Markets fund invests in "companies with superior business models that demonstrate strong and sustainable profitability and a consistent track record overtime."

The Lazard emerging markets option was commended for paying "particular attention to cash flow and its impact on the balance sheet, and consequently shareholder value."

Tom Sayers, senior investment manager at Whitechurch Securities, said: "It is an interesting time for emerging markets. The state of the US dollar and the  protracted trade wars with China have rocked some boats, and Brexit is not to be ignored.

"Like it or not the uncertainty it has aroused is a key factor.

"All these factors have led to greater interest in emerging markets and the indications are that this trend will persevere."

dan.moore@ft.com

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