Focus on China's H-Shares, Ditch A-Shares: Mobius
Emerging equity markets were amongst the top performers in 2010 and Mark Mobius, executive chairman at Templeton Emerging Markets Group, expects the trend to continue this year. The global investor remains heavily exposed to the sector.
"If you look at our portfolios you'll see Brazil at the top followed by India then China then Russia," he outlined on CNBC Wednesday.
While Chinese stocks have had a miserable 2010, tumbling nearly 15 percent to become Asia's worst-performing market, Mobius says there are still opportunities. Buy H-shares and ditch the domestic A-shares, he recommends.
"We should really focus on the H(-shares) and the so called 'red chips' listed in Hong Kong...we're finding lots of opportunity," he added.
Mobius is bullish on the country's oil and gas sector as well as consumer stocks, which he believes are set to benefit from Beijing's push to ramp up domestic demand.
"We are very interested in the Chinese consumer because per capita income is going up and government policy is towards them."
The Decade of Frontier Markets
Franklin Templeton is also betting big on frontier economies such as Nigeria, Vietnam and Kazakhstan, markets typically shunned by investors.
Mobius believes Nigeria offers the greatest potential among the three countries, despite its political uncertainty. His fund is heavily invested in the nation's banking space, following the government reform efforts which include the removal of incompetent or corrupt executives and the restructuring of accounting standards for all financial institutions.
But, Mobius warns that investing in frontier markets isn't without risk.
"The only way you can measure it (risk) is by going there and talking to people and getting some insight into the local situation, which we do quite often. The political situation in these frontier markets is pretty much in flux and you have to be very aware of what's happening on the ground," he cautioned.