Best Profits In Asia – But We Won’t Invest Cash There

Nearly two-thirds of British investors think the best profits are to be found in the Asia Pacific, but only 15% are prepared to back their prediction with hard cash, says a report.

Global Investment Trends, published by investment bank Schroders, says that 57% of UK investors said the best prospects for growth in the coming year were in the Asia Pacific region with China particularly seeming best placed for profits.

Despite only 15% of investors ready to invest funds in the region, the report says that the most popular asset classes are equities in emerging markets such as India, Russia, Brazil as well as China.

Robin Stoakley, head of UK intermediary at Schroders, said: “On the one hand UK investors can see growth opportunities in Asia and emerging markets but on the other they are failing to capitalise on the improving economic conditions.”

The report also found that UK Investors are less keen on risk, with around 50% of those asked saying they would put their money into low risk assets, 38% chose medium risk while 12% opted for higher risk assets.

Wary of risk

However, 46% of those questioned said they would never allocate any portion of their portfolio to high risk assets.

Investors said they were still wary about the ongoing Eurozone debt crisis, flagged up by 67% of those questioned, who said this concern would define their investment strategy for the coming year.

Meanwhile, one fund manager says that investors are right to be concerned and that the current fiscal policies being pursued by governments cannot continue in the long term.

Stuart Edwards, a fund manager at Invesco Perpetual, said: “There’s a reason for the global loosening of monetary policy since developed markets are still deleveraging so a tightening of policy will take place at some point and any move will be well-communicated.

Track trends

“Investors will worry about this tightening long before we see interest rate hikes from the Bank of

England or Fed and this anticipation could move bonds, commodities, currencies as well as equities.”

He urged investors to follow the trends in data closely and be flexible to exploit any upcoming opportunities.

Edwards also highlights the moves by Japan to boost its economy as providing good opportunities and that Brazil has gone against the grain and increased interest rates by 0.25% in April.

He says investors could utilise the expertise in global bond funds as these use a variety of tools to drive up profits by investing in a range of high yield and profit-driven funds which are a sound investment in the long term.

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