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Emerging markets tipped for 2012 success

Emerging markets tipped for 2012 success

Category: Investments

Updated: 15/12/2011
First Published: 15/12/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Fund managers are tipping emerging markets to be the investment region to beat in 2012, as the UK was shown the cold shoulder.

More than a quarter of respondents to the Association of Investment Companies' (AIC) annual fund manager poll believe emerging markets (27%) will be the best performing region next year.

Stocks across the pond have also been heavily backed with the US coming second in the survey with 19% of the vote.

Europe and Asia Pacific excluding Japan shared third place with each catching the eye of 11% of fund managers.

The UK , however, was amongst the least popular regions, with just 4% of fund managers expecting it to top perform.

Yet managers still remain reasonably optimistic that the FTSE 100 will climb higher next year.

Having in the past few days traded between 5,400 and 5,500, one in five (20%) managers predict the index will finish 2012 somewhere between 6,000 and 6,500.

Almost a third (30%) expect it to be in the range of 5,500 to 6,000, while the same amount anticipate little change and have forecast a finishing point between 5,000 and 5,500.

One in ten (10%) think it will end up below 4,500.

The most widely tipped sector to outperform next year is blue chips (20%), followed by financials (16%) and hedge funds (12%).

Annabel Brodie-Smith, AIC communications director, said it had been a tough year for markets with the problems in the Eurozone dominating throughout.

"Fund managers are not surprisingly cautious about next year's prospects, predicting that Eurozone worries will once again preoccupy markets," she added.

"Managers have tipped emerging markets as the best performing region for the third year in a row but in line with a cautious outlook expect blue chips to be next year's top sector.

"Whilst it's interesting to gauge the views of investment professionals, markets are impossible to predict and one year's best performing region can sometimes become the following year's worst performer.

"So it's important to take a long-term view, ensure you have a balanced portfolio and not to get carried away by the latest 'hot' investment sector."

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