Emerging Opportunities in Emerging Markets
Despite the recent slump in several high-profile emerging markets, the group remains a promising investment opportunity with a growing number of new counties in which to invest, according to a panel of top money managers at at CNBC-Institutional Investor2012 Delivering Alpha conference in New York.
"There's an incredible opportunity that'sstill going untapped,"Afsaneh Beschloss, president and CEO of The Rock Creek Group and a Delivering Alpha advisory board member, told CNBC moderator Michelle Caruso-Cabrera.
"It's been the most reliable and compelling investment story of the past two decades, " added fellow panel member Nathan B. Sandler, co-founder and managing director of Ice Canyon LLC. "It's still evolving."
What was once an equities-focused asset class, now includes corporate and sovereign debt and currencies.
Chile and Indonesia were cited as good examples.
Beschloss also mentioned Thailand, Nigeria and Ghana, while Leech cited Colombia.
Leech said the giant Canadian pension plan now has some 16 percent of its funds invested in emerging markets. The fund's first investments were in Brazil and Chile in the mid-1990s. Leech, however, would not disclose specifics about his current strategy.
Despite the bullish tone, many emerging markets have struggled in recent months because of renewed concerns about the EU sovereign-debt crisis, the pace of global growth and a decline in commoditiesprices.
Investors have been particularly concerned about the Chinese, Indian and Brazilian economies, all of which have slowed in the past eight months.
Smaller markets, however, have performed well, with stock markets in countries such as Vietnam, Turkey and Egypt leading gains at various times.
Sandler said he still expects better-than-average returns, partly because emerging markets are at their "lowest risk point in 40 years."
Key drivers, he said, are the continuation of structural reform and economic growth, as well as the emergence of a large middle class, which is "a foundation for growth."
All panelists agreed, however, that risk, remains a factor.
Beschloss, for instance, said there are "still some issues" about the repatriation of capital and regulation in some markets.