Stock markets across the emerging economies have not escaped the recent global equity market turmoil but the outlook for economic growth remains strong, according to F&C's Sam Mahtani. 
     
Mahtani, who manages the F&C Global Emerging Markets Portfolio and is deputy manager of the F&C Emerging Markets OEIC said emerging markets have fallen by some 15 per cent since the peak in July but he believes they are likely to rally back quickly once confidence returns thanks to increasing domestic demand.

"We are focusing on those economies where there is strong domestic demand and where there are internal dynamics for growth, including Korea, Brazil, India, Thailand and Egypt. Although each of these countries is at a different point in the economic cycle, they all share a common trait, namely their growing independence from the US economy as domestic demand continues to increase. This trend looks likely to continue to drive emerging market growth in the future.

"After struggling in the shadow of rising household debt for several years, the Korean economy is showing signs of recovery as improved employment and wage growth allow consumers to pare down some of their debt and increase their spending.

European commercial property markets offer far greater opportunities for portfolio risk diversification than the UK, according to fund of funds manager Seven Dials. 
     
As investors head for the exit doors from many domestic commercial property funds following a sharp fall in returns, latest Seven Dials analysis shows the correlations for some key European and the US property markets vs UK Equities (FTSE) and UK property.

Seven Dials has analysed 10 years of annual data for UK Equities and several different international property markets. The chart shows the correlations between each asset class.

“The clear message from our table is that if these correlations hold true in the future, then international property markets offer very large diversification benefits to UK investors,” said director Simon Critchlow.

“Recent research conducted by the Investment Property Forum (IPF) in the UK on this issue – which comprised data drawn from 1,700 actual assets’ performance in the decade 1994-2004 – showed one needs around 300 properties to reduce portfolio tracking error to below 1 per cent vs the UK IPD index.

Barclays Wealth has launched two new structured products designed to give investors access to infrastructure stocks and the Asian equity market. 
     
The Guaranteed Global Infrastructure Account and Guaranteed Asian Equity Accounts are structured deposits that diversify investors’ savings portfolios by providing exposure to the performance of a wide range of global markets and indices.

Both products are designed to return investors’ capital if held for their full term giving investors the opportunity to invest in new markets while safeguarding their deposits.

The products are available to investors through Barclays Wealth until August 3 2007 and offer a bonus of an enhanced participation rate of 2.50 per cent if invested in prior to July 13 2007.

The Guaranteed Global Infrastructure Account offers potential growth linked to 50 stocks that are constituents of the iShares FTSE / Macquarie Global Infrastructure 100.

Two leading Asia specialist fund managers reaffirmed their belief that despite a decade of outperformance the greatest stock opportunities in the region are still to be found among small and mid cap stocks. 
     
However, according to Citywire AAA-rated Mark Williams, manager of the F&C Pacific Growth Fund, and Peter Dalgliesh, manager of the Pacific Assets Trust plc, stretched valuations mean that selectiveness is more important that ever.

"Small caps have been able to exploit fragmented areas of the market where competition is less intense and grow to a scale at which they can generate formidable barriers to entry, thereby protecting their margins and profitability. With a population and a potential customer base of 1.2bn China has been and continues to be the principal playground for smaller companies, with many untapped areas of growth. One area of the market where we continue to see opportunities is within the soft commodity space," said Williams.
"The prices of soft commodities have risen significantly in the recent past, compounded by rising competition between food and fuel for the first time.