View more on these topics

Investment view

In markets such as those we have been experiencing in this country over recent weeks, investors must be tempted to cast their net further to see if there are value-enhancing strategies available elsewhere.

It was with such a thought in mind that I attended a lunch at which I learned about one major investment house&#39s approach to emerging markets. The house was Baring Asset Management and the fund was Baring Emerging Europe, an investment trust. It is, as the name suggests, focused on European emerging markets but the lunch was nonetheless interesting for being geographically constrained.

The case for emerging markets has remained pretty much unchanged since Dr Mark Mobius first brought some of the more exotic corners of the investment world to the attention of investors. The tendency is for lesser developed countries to play catch-up with their wealthier neighbours, even if Latin America is experiencing more than its fair share of problems. The fact is that they, along with South-east Asia and Eastern Europe, have aspirations to become better off and, although the path is by no means smooth, progress will undoubtedly be made.

In South-east Asia, the Japanese sun is being eclipsed by China. Interestingly, it is China that might give impetus to some of the investments within Baring Emerging Europe.

The Baring boys find Russia an exciting prospect. Those who have attended any of the seminars at which I was speaking last year know that, among the slides I have used to depict the vagaries of international investment, was one demonstrating that Russia outscored them all during 2001 and early 2002. Since then, this market has marked time but when you bear in mind that this compares with equity market losses on a grand scale from most other areas, this is not a bad result.

The fact that Russia was left behind by the West during the last few years of communist rule and saw considerable turmoil as capitalism took hold only serves to demonstrate how much has been achieved in a relatively short period and to highlight the opportunities that undoubtedly exist.

It is the growth of China, though, that could give an extra boost to the resource economy of the former Soviet Union. Oil, minerals, chemicals – all will be needed by this coming super-power with its economic growth that continues to power ahead despite the slowdown in the rest of the world. Russia is geographically well placed to benefit and Baring has around 40 per cent of its assets committed there.

But that is not to say that there are not opportunities elsewhere. Many of the emerging countries of Eastern Europe are queuing up to join the European Union. Convergence will play its part and we can expect a general rise in living standards across a variety of countries, perhaps at a time when the developed part of Europe marks time on the economic front. It is an exciting time for the emerging market investor, which is just as well given the sorry state of our own market.


Yorkshire aims to strike right Accord

Yorkshire Building Society is setting up an intermediary subsidiary, Accord Mortgages, to extend its lending criteria away from the traditional society approach to lending. It says the launch of Accord in March or April will give it freedom to develop products that are wanted by brokers such as loans with higher income multiples. Yorkshire Building […]

Countrywide to sue PI firm over £5.5m in payouts

Countrywide Assurance is aiming to recover £5.5m it paid out in compensation for pension misselling by its direct salesforce by suing its professional indemnity insurer. It follows PI insurer Marshal&#39s refusal to reimburse the firm, claiming that Country-wide had paid more compensation than it needed as some clients were compensated even though there was no […]

Independent view

As I write this article, the FTSE 100 has just fallen below 3,500 and I am starting to wonder whether turning down the offer to be vocalist in a young Parisian snowboarder&#39s band back in 1993 was, in hindsight, a bad career move. The music business did not offer much in the way of job […]

The pension message is to get out and stay out

We recently got Scottish Widows&#39 guide to contracting out (via personal pensions started before June 4, 2001) for the 2002/03 tax year. Then we got another guide to contracting out, this one in respect of personal pensions started on or after June 4, 2001. Then we got a third one, this in respect of stakeholder […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm