The balance of financial power is moving toward emerging markets , such as Asia and Latin America, James McCaughan, CEO of Principal Global investors, one of the largest asset management firms, told CNBC on Friday.
"For the next ten years, I would suggest that equities will be number one—with U.S. and emerging market equities probably the best place to be," McCaughan said.
"The change in emerging markets because of the economic change that happened in the 90's, a move towards market economies, has been a tremendous wealth generator, and long-term that will continue to be the case," he said.
"If you look out over the next five to ten years, very little doubt, that emerging markets are a great place to be,"McCaughan said.
"Some of the trades get crowded short-term and you can see periods of under-performance," he said.
Over the next ten years, McCaughan said, the pattern is likely to be very different from the last ten years," he said.
"Equities started off that period very expensive—that is emphatically not the case now. You have had a compression of ratings, equities are fundamentally quite cheap at a time when the economy is improving," McCaughan concluded.
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