Financial Advisors Are Keen on Investments in Emerging Markets

Posted by adaniels in Blog on August 1, 2012

A recent survey of financial advisors revealed that many are recommending nontraditional investments, such as investing in emerging markets, to their clients. Financial Advisor Magazine reports that Oppenheimer Fund’s survey of 107 financial advisors was conducted at the recent Morningstar Investment Conference, held in Chicago in June.

According to the survey, 84% of the advisors recommended dividend-paying equities, and 76% were keen on “emerging market bonds or funds,” the magazine reports. This is in contrast to the 48% who would suggest U.S. equities, or the 31% who gave a thumbs up to municipal bonds.

Half of the financial advisors surveyed said that customers interested in emerging markets should directly invest in companies in such markets, while 21% preferred “investing in large global multinational U.S. companies,” the magazine reports.

“Advisors are reacting to their clients’ being uncomfortable with the volatility of the market and are looking at other ways to generate more income,” Lori Heinel, chief investment strategist for Oppenheimer Funds, tells the magazine. “They are recognizing emerging markets are a potential asset class and that emerging markets are not as risky as they once were.”

The advisors said that the two most important issues affecting the advice they gave to their clients are the European debt crisis, at 59%, and the presidential elections, at 26%. In addition, 52% said that keeping their clients “from the downside of a volatile market” is their top challenge.

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