HSBC Asset Management predicts overall strong investment returns from Brazil, Russia, India and China this year despite anticipating continued volatility.
Notwithstanding robust economic growth, investors pulled money out of the BRIC bloc last year as part of wider risk-aversion. Although the investment outlook has turned dire after a positive first quarter, the UK asset manager thinks the BRIC markets, made up of the world’s four largest emerging economies, can play an important role for investors in 2012.
“Not only are valuations in these global emerging markets looking attractive relative to historical standards where emerging markets are trading at a 25 per cent discount to their long-term average, but we continue to see solid fundamentals and robust economic activity in these economies,” said Philip Poole, global head of macro and investment strategy at HSBC Global Asset Management.
“In addition, inflation, which had been of major concern last year, has shown signs of moderation,” Poole said.