A portfolio of all global emerging markets, BRICs and Asia favoured over the short and long term.
New research from Baring Asset Management reveals that 12% of investors are looking for exposure to emerging markets within the next 12 months. The amount of people seeking investment opportunities in emerging markets has steadily increased year-on-year since 2009, rising from 9% to 12% this year.
Analysis of data from the Investment Management Association (IMA) also reveals a yearly increase in funds under management in global emerging markets equities, rising from £6.2 billion in 2009, to £9.6 billion in 2010 and £13.1 billion in 2011.
Gender and age divide
Interestingly, 17% of men are considering investing in the region which is almost double the number of women (9%). Women, however, are increasingly favourable towards the emerging markets given only 5% would think about investing in the asset class in the two years ago.
The research also found that people aged 18-24 and 25-34 are most likely to invest in emerging markets in the next year (21% for both age ranges). This is over five times the number of those aged 55-64 (4%) but surprisingly only three times those aged 65+ (7%).
Short term vs long term
Looking to the short-term, if people were going to invest in emerging markets, they would most likely chose a portfolio that covers all emerging markets (9%) and the BRIC region (9%), made up of Brazil, Russia, India and China.
However, over the long-term, people prefer to spread their investments picking all global emerging markets (11%), BRICs (7%) and Asia (6%).
Rod Aldridge, Head of UK Retail Distribution at Barings: "We are seeing an increasing number of investors looking for exposure to emerging markets year-on-year and we anticipate this trend will continue given the enormous potential for growth compared to developed markets.
"Clearly investors are seeing the benefit of diversifying their investments as they opt to invest across a number of regions within the emerging markets; which is important given each region varies hugely in terms of the risk/reward profile it offers. Investing across global emerging markets as a whole is particularly favoured over the short and long term.
"Investors should always remember that emerging markets can be very volatile and investing in them many not be suitable for everyone. If in any doubt, investors should consult a professional adviser."
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