Emerging market equities look set to offer exciting investment potential as the global economic recovery begins, Baring Asset Management has claimed.
According to Marino Valensise, chief investment officer at Barings, the general rally in equities that has been seen during the last six months is set for a pause, but, "it is emerging market equities that will offer the best returns."
Barings claims that emerging market equities have, "the ideal mix of attractive valuations, positive revisions to earnings estimates, healthy economic growth, low interest rates and supportive fiscal and monetary policy". And this looks set continue.
In fact, Mr Valensise said: "Any long-term investor should have a significant allocation to countries where GDP per capita is going up fast."
China is a key example of this, he adds, stating that, "There is as much liquidity in China presently as there was back in 2003 and because of this, it's very much business as usual in China currently."
Barings also believes that the rise of Chinese consumerism will eclipse the US and drive the world economy over the next decade, which is why the asset management firm believes, "investors should be looking to tap into this exciting growth opportunity sooner rather than later."
Copper, gold and agricultural commodities are also expected to support the outperformance of emerging markets.
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