OPM Fund Management has started to increase Far East/emerging market exposure after reducing it earlier this year when developing regions were expected to underperform.
The firm has increased emerging markets exposure in its worldwide opportunities fund by 2.5 per cent through the Allianz RCM Bric stars fund, managed by Michael Konstantinov.
OPM says the Bric fund has had a torrid time this year but the firm’s outlook and holdings reflect OPM’s own views on those regions.
OPM likes all four regions, pointing out that Russia is a massive play on resources and that long-term growth is likely to be secular rather than cyclical.
It is also tapping into the Asian consumer theme through its holding in the Matthews Asia funds Pacifictiger fund.
OPM chief investment officer Tony Yousefian says urbanisation in India and China, where people are earning more and the middle class is growing, is fuelling growth.
He feels it is worth being overweight in these markets on a secular rather than cyclical basis.
Non-sterling exposure is also an advantage for OPM because the team expects sterling to remain weak, enabling investors to benefit from Asian currencies.
Yousefian says: “Part of our job is to seek less well known managers who fit in with our investment outlook and processes. Matthews is a big US manager that we got to know some time ago. It runs purely Far Eastern/Asian money and is looking to expand into Europe. It sees the UK as a good base for that.”