13 Mar, 2008
Sara Smith | 00:01:00 | 13 March 2008
Currie's Daruisz Sliwinski says 2008 could be a far trickier year
of emerging markets.
Sliwinski said: 'It's been a difficult year so far, January was not
a good month and although we stabilised the performance during
February, we are not entirely happy.'
'We are not going to try and outperform ourselves though because
it never pays off and we've been through these sorts of times
before. These things have happened in the past and the lesson is to
stick with the fundamentals.'
The AA-rated manager, who runs the firm's £51m Emerging
Market fund, said that good stock selection is going to be critical
to get through the next twelve months.
'Our profit is very bottom up driven so the outcome of the
portfolio is ultimately down to stock selection. Stand by the
companies who you believe are high quality, are valued reasonably,
with good transparency and that you have confidence in.' he said.
'If you look at our portfolio you will find we are overweight in
Latin America and underweight position in Asia. Asia is far more
cyclical and the stocks in Asia at this moment in time are less
transparent. Asian banks have some fundamental issues and the out
look for change is very unclear which is why we don't find them
very exciting. It's not that we are actually avoiding them, it's
just that we don't find them exciting enough.'
'In general Asian banks have very strong balance sheets but there
are some underlying issues. Korea for example is experiencing
funding problems as loans are growing faster than deposits so they
are having to borrow from elsewhere.'
Sliwinski said that he is placing a higher weighting in Latin
America because he feels it holds some largely untapped
'There are a lot of very interesting stock ideas in Latin America
mainly because of the domestic sector. Strong consumer spending,
the emerging middle class and an increased demand in property is
Sliwinski admits that the current problems being experienced in the
US will no doubt affect these areas but said he believes that the
situation will not be as dire as some people imagine.
Overall he remains upbeat, albeit a little cautious, about 2008. He
said: 'I would never forecast absolute return for the emerging
markets but I do predict that the emerging markets will out perform
the developed markets in 2008. It was easier before and now it is
trickier, but I strongly believe that the sector returns will be
The Martin Currie Emerging Market fund delivered a return of
17.43% over a twelve month period to the end of January, versus a
peer group average of 19.05%.