Talking Point  

Advisers sticking with emerging markets despite geopolitical turmoil

Advisers sticking with emerging markets despite geopolitical turmoil
US secretary of state Antony Blinken and Ukrainian foreign minister Dmytro Kuleba. (Left to right. Credit: Evelyn Hockstein/Pool/AFP)

A majority of advisers intend to retain their investments in emerging markets, despite uncertainties brought about by the ongoing geopolitical turmoil, namely the invasion of Ukraine by Russia, according to the latest FTAdviser poll.

The poll found that 64 per cent of respondents are extremely unlikely to move away from emerging markets, while 19 percent said it was somewhat unlikely.

The poll has come at a time when emerging markets are already being hit by a global slowdown and rising inflation.

Additionally, any growth in emerging markets is being dragged down by China, which has been persisting with its zero-Covid policy.

Tim Morris, an independent financial adviser at Russell and Co, said: "I took part in the poll and was in the majority. Emerging markets has been badly impacted by Russia. Most funds have now sold their Russian holdings.

"As per usual, the sell-off will present opportunities for investors. While it’s unlikely to be a quick win, to paraphrase Warren Buffett, ‘be greedy when others are fearful’.

"Partly because many of their economies are commodity driven, emerging market equities have performed well in a high-inflation environment. And they are generally further along with monetary tightening than western economies."