Talking Point  

Advisers prefer global funds to gain EM exposure

Advisers prefer global funds to gain EM exposure

Advisers tend to use global equity funds as a way to invest in emerging markets, according to the latest poll from FTAdviser.

The data shows 68 per cent of the respondents to the poll prefer to access emerging markets via global funds, with only 6 per cent choosing to invest directly in emerging market funds directly.

Data from FE Analytics shows that funds in the IA Global sector have gained 4 per cent over the past year to 6 July,  while the average emerging market fund has lost just over one per cent in that time period.

Just over 12 per cent of those advisers said they access emerging markets via regional specific funds.

Emerging markets tend to perform less well in times of global economic uncertainty. This is because US based investors tend to bring their money back home at times of crisis, resulting in dollars leaving emerging markets, making it more difficult for those countries and companies to fund themselves.

But since March, shares listed in China have performed strongly.

Sonal Tanna, emerging market portfolio manager at JP Morgan Asset Management said it is no longer valid to group all of the countries that typically are called “emerging markets” as those economies and stock markets have taken different trajectories in recent years.   

david.thorpe@ft.com