To earn stronger returns, institutional investors need to skew more toward emerging markets and other areas, Byron Wien, a vice chairman at the BlackstoneGroup, told CNBC Thursday.
“The world is a very different place from what it was 5 to 10 years ago, and portfolios need to recognize it,” said Wien. He recommended more exposure in Asia, India and Latin America and emerging markets in general, where two-thirds of the economic growth is happening.
Specifically, he suggested this breakdown in a portfolio:
- 20 percent each in emerging-markets equities, hedge funds and high-yield fixed income
- 10 percent each in large-cap multinational growth equities, private equity and real estate
- 5 percent each in gold and commodities
Wien said that those looking for exposure to emerging markets should invest directly in those markets and also in Chinese and Indian companies, for instance, on the NYSE .
Wien recommended no exposure to US Treasurys, but said that US equities are solid. “There are real opportunities in the US,” he said. “You have earnings growing at a reasonable rate, and you can sell it at 15 times earnings.”