UK investors are bullish on emerging markets as only gold ranks higher, says Franklin Templeton research
Emerging markets have seen a surge in popularity with UK investors, according to investment firm Franklin Templeton.
More than half of independent investors surveyed, at 55 per cent, said that now was a good time to invest in less developed markets. Meanwhile a quarter said they were more positive about the asset class than a year ago.
Only gold ranked above emerging markets equities in terms of investor positivity, with commodities, US equities and UK property all tailing the asset class.
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“We’ve seen a number of positive developments in emerging markets over the past 12 months. The Chinese economy remains on a fast growth trajectory, a number of countries such as Brazil, India and Argentina have undergone progressive political and economic reforms, and there has been solid performance across most emerging markets,” said Chetan Sehgal, a portfolio manager for Franklin Templeton’s £2.3bn Templeton Emerging Markets Investment Trust.
“In our view, emerging markets still offer some of the best undiscovered opportunities in the world. Rapid economic growth alongside demographic shifts, technological innovation and increased household spending are providing us with a range of opportunities.”
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Of the investors who had become more positive about emerging markets, 42 per cent said it was because the asset class was a long-term play that would help grow their cash. Almost a third said their outlook had improved because of emerging markets’ shift towards innovation, technology and consumption, and added this could provide more high-growth opportunities.
Meanwhile 29 per cent said that rising consumer spending was driving the growth of emerging markets, and a similar proportion believed the asset class offered better returns than any other.
On this note, investor confidence in emerging markets appears to be returning. A third of those who currently have money in the asset class said they expected to see better returns over the next 12 months than the last, while only eight per cent expected returns to drop.
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