UK investors believe emerging markets will outperform

According to research conducted by New Star, 70% of sophisticated investors believe emerging markets such as China, India, Africa and Latin America will generate superior investment returns in comparison to developed markets such as Europe, US and Japan in the medium to long term. The research, conducted in association with NMG, surveyed 334 sophisticated investors from across the UK.

The survey revealed that 90% of investors had exposure to the UK, 40% had exposure to the rest of Europe, 22% had exposure to the US and 14% had exposure to Japan. In spite of the belief that emerging markets will outperform developed markets over the medium to long term just 10% had exposure to China, 7% had exposure to India, 4% had exposure to Latin America and a mere 2% had exposure to Africa.

Of those surveyed, more than half (51%) were considering increasing their exposure to emerging markets such as India, China, Latin America and Africa.

With industrial output in the seven largest emerging economies of the world currently rising at 12% per annum, compared to just 2% for the seven major developed countries, the argument for investment in emerging markets appears to be compelling.

Rob Page, marketing director, New Star, says: “This research shows that the potential of emerging markets appears to be well recognised but investors remain cautious and appear to be willing to sacrifice outperformance for more familiar markets.

“This clearly highlights that the majority of investors lack balance in their portfolios and provides compelling evidence of the need for quality independent advice if they are to access the potential of the new economic world order.”