Franklin Templeton Research: UK Investors are Bullish on Emerging Markets As Only Gold Ranks Higher

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According to Franklin Templeton, an investment firm, developing markets have observed a surge in popularity with investors in the United Kingdom.

Over half of the independent investors that were surveyed, at 55 percent, stated that now was a good time to invest in the less developed markets. Meanwhile, a quarter said that they were more positive about the asset class compared to a year ago.

Only gold ranked to be above the emerging markets equities in terms of investor positivity, with US equities, UK property, and commodities all tailing the asset class.

A portfolio manager for the £2.3bn Templeton Emerging Markets Investment Trust of Franklin Templeton, Chetan Sehgal, stated: “We’ve seen a number of positive developments in emerging markets over the past 12 months. The Chinese economy remains on a fast growth trajectory, a number of countries such as Brazil, India and Argentina have undergone progressive political and economic reforms, and there has been solid performance across most emerging markets.

“In our view, emerging markets still offer some of the best undiscovered opportunities in the world. Rapid economic growth alongside demographic shifts, technological innovation, and increased household spending are providing us with a range of opportunities.”

Of all the investors who had become more positive about the emerging markets, 42 percent said that it was because the asset class was a long-term plan that would help increase their cash. Nearly a third said that their outlook had improved due to the shift of the emerging markets towards technology, consumption, and innovation and added that this could likely provide more opportunities for high-growth.

Meanwhile, 29 percent said that increased consumer spending was driving the growth of the emerging markets, and a similar proportion believed that the asset class gave better returns compared to any other.

On this note, investor confidence in the emerging markets seems to be returning. A third of those who currently hold money in the asset class said that they expected to observe better returns over the next 12 months compared to the last, while only eight percent anticipated returns to decline.