Two-thirds of investors back Asia and emerging markets in 2010

The latest in F&C Investments' monthly online polls has shown investors overwhelmingly backing Asia (41.7% of respondents) and emerging markets (25%) as the stockmarkets they believe will perform best in 2010.

F&C's Question of the Month for November asked "Which market do you believe has the best investment potential over the next 12 months?". Users of F&C's investment trust website, fandc.co.uk, were less keen on developed markets, with 5% backing Britain and only 1.7% favouring the US. Japan did slightly better, with 6.7% of votes, while 11.7% thought Europe had the best prospects.

The question was live on site for the whole of November, so included the few days after Dubai's debt repayment freeze ruffled the feathers of markets around the world.

In spite of big inflows reported by the Investment Management Association into property funds in recent months, property was favoured by just 5% of respondents, with only 3.3% backing private equity as the market with the best prospects.

Mike Woodward, head of investment trusts at F&C Investments, commented: "With the West having suffered so badly in economic terms over the past year and then recovered so well in stockmarket terms, it seems quite natural for our investors to favour markets where the economic growth prospects seem stronger. It will be interesting to see over the coming year whether our respondents' convictions are correct."

The manager of F&C's largest and oldest investment trust, Foreign & Colonial Investment Trust, is also cautiously optimistic on the prospects for emerging markets over the coming year. "Notwithstanding the risks of a market correction, the fundamental growth prospects for emerging markets remain stronger than the developed economies, where growth could be anaemic for some time," said Jeremy Tigue.

However, on a valuation basis, Tigue points out that emerging markets command a premium to developed economies and that it may be harder for investors in 2010 and subsequent years to repeat the extremely high level returns seen in recent years.