Investing in China and pacific region

theGrinch

I have been thinking about moving a proportion of my investments into the pacific area, as I was thinking it would recover first and faster than developed economies.

However, after reading about the surge in the Chinese Stock Market in 2009, then I am wondering whether I have missed the boat and that the market may fall before it rises again. Is there anything material that should be factored?

Would either of these stories deter you from buying into emerging market funds (10 year view)?

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6086447.ece


http://business.timesonline.co.uk/tol/business/economics/article6088955.ece

ozzage

Not that I'm an expert, but if you have a long term view then I believe it is still a very good idea to invest in emerging markets.

JayZed

I have a proportion (about 8%, I think) of my investments in AsPac funds, with a bias towards China. They've suffered in the past year or so, though not really any worse than the investments I have in developed economy funds.

I fear there's worse to come for AsPac, though, and I don't think it will necessarily recover first or faster than developed economies. I think that Chinese recovery in particular will be linked to recovery in the US.

Having said that, and assuming that you're planning to make long-term investments, you could certainly do worse than putting a proportion into AsPac. I think there's still lots of potential for significant long-term growth, though probably not at the same rapid rates that we saw before 2007.

This is idle speculation, I'm not an investment professional.

Hatone

I agree with the above post. Now is still a good time to buy into Asian funds, so I wouldn't necessarily say you've missed the boat. I do believe, like some professional investors, most of the world's growth will come from emerging markets.

Another area to consider is Russia, the main part of emerging Europe. The average stock is on the rise and should offer great returns in the years to come, especially once oil prices start to recover. Funds like Neptune Russia and Jupiter emerging markets have all increased their holding in Russian companies as opposed to Asian companies. Just food for thought.

wombat42_2

Emerging markets (Brazil, Russia, China and India) are likely to do very well over the next 10 years or so but expect a bumpy ride. So be sure it is money you dont need to touch for a long time.

theGrinch

thanks everyone. some interesting comments which have been helpful to me and I am sure to others. Its always good to get independent views even though you believe it yourself.

At present, my holding is somewhat biased to UK and income generative funds. I was thinking over next 24 months rearranging to roughly: 20% in asia pacific, 10% latin/south america, 10% america, 40% UK, 5% europe, 5% russia, 10% india. Still thought in progress as researching and reading.

Im favouring
First State Greater China Growth,
First State Asia Pacific,
First State Asia Pacific Leaders
Fidelity South East Asia.

As I am 36, I can probably afford to take a 15-20 year view and I am sure there will be another one or two cycles out there.

Does this seem reasonable?

Hatone

First State Greater China Growth & First State Asia Pacific Leaders are both very good funds with excellent managers (Angus Tulloch & Martin Lu) My biggest holding is FS Asia Pacific leaders.

There's Gartmore China fund - though it is quite pricey to buy into because it is an old and established fund. Personally I'd buy into First State funds as they're reasonably priced and the peformance has been consistent.

wombat42_2

I would have been tempted by Allianz BRIC stars:
http://www.h-l.co.uk/funds/security_details/sedol/B0WDH72

I am personally going the commodity route as the increase in commodity prices will largely be fuelled by growth in emerging markets.

theGrinch

wombat42 wrote: »

I would have been tempted by Allianz BRIC stars:
http://www.h-l.co.uk/funds/security_details/sedol/B0WDH72

I am personally going the commodity route as the increase in commodity prices will largely be fuelled by growth in emerging markets.

I have some in BlackRock Gold & General. Its done really good things under Graham Birch in the last decade. I dont really want to put more into it as I would prefer to spread my commodity interests a bit.

I am thinking thinking oil and copper for the recovery.

Picking your brains; are you moving into commodities via funds or etfs (new area for me)?

wombat42_2

theGrinch wrote: »

I have some in BlackRock Gold & General. Its done really good things under Graham Birch in the last decade. I dont really want to put more into it as I would prefer to spread my commodity interests a bit.

I am thinking thinking oil and copper for the recovery.

Picking your brains; are you moving into commodities via funds or etfs (new area for me)?

I like the following two all round commodity funds - let the manager do the allocation switching for you:
Marlborough ETF Commodty (pures commodities only)
Investec Enhamced Commodity (mainly commodity shares and some pure commodities)

JayZed

Grinch, I can't really comment on specific funds, but I would say that 45% of your portfolio in emerging markets is quite a high-risk approach for a 36-year-old. It depends on your risk tolerance, of course, and it could potentially give you excellent returns, but it could be a volatile ride.

Commodities can also be tricky, not least because commodity slumps can last a long time. There's certainly a good argument to put some of your portfolio into various commodities, but personally I'd probably limit it to no more than 20% or so. Having a balance of commodities with equities and bonds can be a good strategy for spreading risk, though.