Asset Classes
In this section…
The contrarian
BRIC 39-40
“Those investment
commentators largely bullish on
BRIC and a continued emerging
market growth story are the
same commentators who
remember the gains made
between 2002 and 2007 all
wiped out in one very bad year”
Gary Corcoran questions whether
investors should place such a
heavy reliance on the consensual
nature on emerging markets, BRIC
in particular
Fixed income
FORWARD RATES 43-44
“Looking at forward rates offers
a clarity and simplicity of
analysis and positional
freedom” Duration is old hat as far
as a method of measuring the risk
of a bond portfolio is concerned,
with forward rates being a more upto-date
alternative
Equities
ASIA EX CHINDIA 41-42
“Investors yearning for
exposure to the Chindia growth
story may also explore the
investment options in one of
the 14 or 15 countries that
encircle these two giants”
Asia has more to offer than just
China and India so Helen Burggraf
looks at what they are, where they
are, and how investors can take
advantage of them
Not all roads lead to China
It is impossible to talk about any investment strategy
right now without falling over China or stumbling across
BRIC – it is appalling to invest in an acronym but it seems
like this is one that makes more than just a modicum of
investment sense, unlike, say, MENA. But there is much
more to equity investing, and certainly more to debt
investing, than just China or BRIC.
China has relatively little to offer direct overseas
investors and Brazil is now taxing overseas investors
for the privilege of even preparing to invest there
– protectionism working in their favour.
The Asia macro story cannot be ignored and nor can
the global growth one, but the world is a bigger place than
just China or BRIC...
■ According to figures from the IMA, UK equity investors
still had a heavy domestic bias up to the end of October
’09, with £144.92bn out of a total of £277.46bn equity
money in UK equity funds.
■ They invested £20.5bn into Asia Pacific ex Japan equity
funds, £15.55bn into the US, with £30.31bn in Europe.
■ What the figures do not show is the extreme reliance
that the underlying stocks in these equity funds have on
trading with emerging markets, with Asia and the BRIC
countries in particular.
Source: Investment Management Association
38 PORTFOLIO ADVISER JANUARY 2010 [www.portfolio-adviser.com]
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