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Chatfeild-Roberts: value is opening up in EM

Chatfeild-Roberts: value is opening up in EM

Value ‘is now starting to appear’ in beaten-up emerging markets following a week of the greatest market volatility since 2011, Jupiter’s John Chatfeild-Roberts has said.

The Jupiter Merlin boss said that the fund range had not yet made any changes to its asset allocation and would continue to wait ‘until the dust has settled’ before reviewing any strategic changes.

Chatfeild-Roberts currently holds minimal exposure to developing equity markets and zero direct exposure to the commodity complex, have ditched related assets a year ago.

‘Once the dust has settled, the main impact for investors will be on holdings in emerging markets, where value seems to be now starting to appear, and commodities,’ he said.

‘Overall, the bull market in shares is getting long in the tooth but QE (quantitative easing) is still a major factor for markets in Europe, the US and Japan and will remain so while concerns at central banks about the debt burden remain. Policymakers are also likely to defer planned rises in interest rates.’

He added that the fund’s core exposure remained to managers with a defensive bent, and a primary focus on developed market equities, including Neil Woodford, Terry Smith, and James Findlay.

‘Many Western economies, the US and UK in particular, are seeing good growth as shown by falling unemployment and rising wages.  The fall in the oil price, which I believe has been driven more by supply (more efficient fracking & continued Saudi pumping) than demand, is a huge positive which should boost economic activity by reducing prices for consumers and cutting production costs for manufacturers

‘The Chinese market bubble has been bursting for some time and it probably has further to fall. However, I feel that the declines in Western stock markets have been a knee-jerk reaction in thin summer trading.  August has often been a good buying opportunity historically.’

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