Global Investing

Rich investors betting on emerging equities

By Philip Baillie

Emerging equities may have significantly underperformed their richer peers so far this year (they are about 4 percent in the red compared with gains of more than 6 percent for their MSCI’s index of developed stocks) , but almost a third of high net-worth individuals are betting on a rebound in coming months.

A survey of more than 1,000 high net-worth investors by J.P. Morgan Private Bank reveals that 28 percent of respondents expect emerging market equities to perform best in the next 12 months, outstripping the 24 per cent that bet their money on U.S. stocks.

That gels with the findings of recent Reuters polls where a majority of the 450 analysts surveyed said they expect emerging equities to end 2013 with double-digit returns.

(Note a caveat on the survey – the responses were collated before recent unsettling events in Cyprus – which could have some knock-on effects on emerging markets, especially given the banking exposure to countries such as Slovenia, Luxembourg, Malta and Russia).

However, regardless of the growing list of risks, 60 percent of the investors pick equities as their top performing asset class for the next 12 months –  more evidence that the so-called Great Rotation — the offloading of bond holdings in favour of equities — remains a theme despite some growth and political risks.

from Funds Hub:

UCITS IV Everyone

It is early days at the Reuters fund summit in Luxembourg, but already a few themes are building. For one thing, no one seems to be too negative about the investment climate.

For the most part, however, the attendees are focused on how the industry will recuperate from the battering it has suffered during the financial crisis. Again, there appears to be a degree of optimism. Most of the talk is about UCITS IV, which is fundspeak for a new kind of pan-European fund that is easier to distribute.

Essentially, it a) allows fund managers to register a fund in one place and have it listed across Europe and b) allows for smaller, local funds to be fed into it.

Reuters Funds Summit: Madoff, the silent presence

Master-fraudster Bernie Madoff is the invisible guest at an annual fund fest in Luxembourg, the European capital for fund administration.

Even though the former Nasdaq chairman is under arrest thousands of miles away from this discreet financial centre nestled between Belgium, France and Germany, his presence was omnipresent. Fund managers just can’t stop mentioning him.

 One example: “The hedge fund bubble has popped. The market bubble has popped, and to put a cherry on the top you had the Madoff probe in December,” said Ken Kinsley-Quick from hedge fund Thames River Capital.