In an Atlantic storm should you head for the Asia Pacific?

As Western markets see-saw, Angelique Ruzicka looks at the case for backing the buoyant Far East

With the US economy looking dicey and the UK stock market proving volatile, is it time to go East to boost your investments?

"The Far East represents better value than the West in terms of property, equities and currencies," says Patrick Armstrong at fund management group Insight Investment. "We expect to see a continued slowing and potentially recessionary US economy, while Asia will experience much better prospects in 2008."

"In September, Asia was the best sector and the best funds were 15 per cent up," says Mark Dampier, head of research at independent financial adviser Hargreaves Lansdown.

The Far East has performed well because many countries in the region have gone through a rapid economic transformation and become more accessible to foreign investors. China's stock market, for instance, barely existed in 1996 and was limited to domestic investors. Since then the government has initiated massive reform, including privatising state-owned enterprises and opening its capital markets to foreign investors.

There are plenty of ways to invest in the region. You can either buy into a global fund or a Bric (Brazil, Russia, India and China) fund, both of which give a degree of exposure to the Far East. Alternatively, there are funds that concentrate on Asia and ones that invest in single countries. "You could go for Aberdeen Asia Pacific or buy straight into Jupiter China, which has virtually doubled since it was launched over a year ago," says Mr Dampier.

However, investing in only one country could be very risky. For example, if Chinese equities fell, there would be no place to hide.

Opinion is split on how much of their portfolio investors should allocate to Asia. Usually the advice is around 10 per cent, but returns have been so good that some experts are advocating closer to 20 per cent. "Of course, it does depend on your investment time frame and how old you are," says Mr Dampier.

Other advisers counsel caution. "As a general rule for core investments, stick to what you know. The danger for Far East investors is not having enough information," says Ashley Clark of Needanadviser.com.

Remember, there are risks in investing in Asia, as shown by the turmoil in Burma. And although China is expected to keep growing, it is not immune. "If you wanted to look for a single act to focus on, there is the Beijing Olympics; China could experience a 'hangover effect' from an event like that, although any big fall there is more of a buying opportunity than anything," says Mr Dampier.

He adds: "I would go for an Asian fund that excludes Japan, which is the opposite of the other Asian countries: it has an ageing population and it's slow to change."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Guru Careers: Graduate Editor / Editorial Assistant

    £16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Day In a Page

    Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

    Please save my husband

    As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
    Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

    They shall not be moved: jobless protesters bring Tunisia to a halt

    A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
    David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

    Hanging with the Hoff

    Working with David Hasselhoff on his new TV series was an education for Ella Smith
    Can Dubai's Design District 'hipster village' attract the right type of goatee-wearing individualist?

    Hipsters of Arabia

    Can Dubai’s ‘creative village’ attract the right type of goatee-wearing individualist?
    The cult of Roger Federer: What is it that inspires such obsessive devotion?

    The cult of Roger Federer

    What is it that inspires such obsessive devotion?
    Kuala Lumpur's street food: Not a 'scene', more a way of life

    Malaysian munchies

    With new flights, the amazing street food of Kuala Lumpur just got more accessible
    10 best festival beauty

    Mud guards: 10 best festival beauty

    Whether you're off to the Isle of Wight, Glastonbury or a local music event, we've found the products to help you
    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf