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; request a free guide on NISAs from Hargreaves Lansdown

Travel
travel
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
News
Jamie and Emily Pharro discovering their friend's prank
video
Arts and Entertainment
Taylor Swift crawls through the legs of twerking dancers in her 'Shake It Off' music video
musicEarl Sweatshirt thinks so
PROMOTED VIDEO
News
Our resilience to stress is to a large extent determined by our genes
science
Travel
travel
Arts and Entertainment
tv
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Pornography is more accessible - and harder to avoid - than ever
news... but they still admit watching it
Arts and Entertainment
The eyes have it: Kate Bush
musicKate Bush asks fans not to take photos at London gigs
News
i100
Extras
indybest
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
News
i100
Arts and Entertainment
O'Toole as Cornelius Gallus in ‘Katherine of Alexandria’
filmSadly though, the Lawrence of Arabia star is not around to lend his own critique
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

    Junior Database developer (SQL, T-SQL, Excel, SSRS, Crystal rep

    £25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...

    Java/Calypso Developer

    £600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...

    Quantitative Developer

    £700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...

    Web developer (C#, MVC4, HTML5, CSS3, Javascript, Jquery)

    £30000 - £44000 per annum + Bonus+Benefits+Package: Harrington Starr: Web deve...

    Day In a Page

    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
    Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

    Lauded therapist still in limbo as battle to stay in Britain drags on

    Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
    Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

    Lewis Fry Richardson's weather forecasts changed the world...

    But could his predictions of war do the same?
    Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

    'I want to have contact with the audience, not iPhones'

    Kate Bush asks fans not to take photos at her London gigs
    Under-35s have rated gardening in their top five favourite leisure activities, but why?

    Young at hort

    Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
    Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

    Beyond a joke

    Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

    Sadly though, the Lawrence of Arabia star is not around to lend his own critique
    Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

    A wild night out

    Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
    Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

    Comic Sans for Cancer exhibition

    It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
    Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

    Besiktas vs Arsenal

    Five things we learnt from the Champions League first-leg tie
    Rory McIlroy a smash hit on the US talk show circuit

    Rory McIlroy a smash hit on the US talk show circuit

    As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
    Boy racer Max Verstappen stays relaxed over step up to Formula One

    Boy racer Max Verstappen stays relaxed over step up to F1

    The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
    Fear brings the enemies of Isis together at last

    Fear brings the enemies of Isis together at last

    But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
    Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

    Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

    Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment