UK wealth managers are increasingly directing investments towards emerging markets, driven by the pursuit of higher returns and diversification. A recent survey by Funds Europe indicates that 60% of UK wealth managers plan to boost their allocations to these markets over the next year. This trend is influenced by the robust economic growth and expanding middle-class populations in countries like China, India, and Brazil, which present attractive investment opportunities.
Despite the potential for higher returns, investing in emerging markets carries inherent risks, including political instability and currency fluctuations. To mitigate these risks, wealth managers are adopting diversified investment strategies and conducting thorough due diligence. Additionally, the rise of environmental, social, and governance (ESG) considerations is shaping investment decisions, with managers seeking opportunities that align with sustainable and ethical standards.
The increasing interest in emerging markets reflects a strategic shift among UK wealth managers aiming to capitalise on global growth prospects while managing associated risks. This approach underscores the importance of a balanced and informed investment strategy in navigating the complexities of international markets.
The growing focus on emerging markets by UK wealth managers highlights a proactive approach to enhancing portfolio performance through global diversification and strategic risk management.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.