His approach is to focus away from some of the better-known parts of the emerging market universe, and away from traditional commodity producers, and instead look to natural gas-producing countries and companies listed on the stock markets of the gulf.
Chasing the dollar
Whatever the longer-term trends in the emerging world, clients' investments in the asset class must always be aware of the impact the performance of the US dollar has on the emerging world.
The dollar has been very strong this year to date as the market anticipates higher interest rates.
Higher rates makes the income from US government debt worth more in countries that use a currency other than the dollar.
In such circumstances, investors, seeing the higher returns from a lower risk asset such as US Treasuries, see no need to invest in higher risk assets, such as emerging market equities.
This effect is amplified if, as is currently the case, US rates are rising at the time when many market participants fear a global economic downturn, and so do not wish to own risky assets anyway.
The validity of the above theory was most recently tested in real life conditions in 2013, when an episode occurred in markets that became known as the 'taper tantrum'.
The US Federal Reserve announced plans to taper its quantitative easing programme and restore monetary policy to more conventional settings.
Although none of this should have mattered much to emerging market economies, emerging equity markets promptly sold off, as investors anticipated higher interest rates pushing bond yields upwards.
Nick Payne, emerging market fund manager at Jupiter Asset Management, says while the impact of higher interest rates on emerging markets is well known, the extent of that impact depends on the markets' view of whether rates are rising for the “right reasons”, that is, because economic growth is occurring and inflation has to be managed.
He says in such an environment, while there may be an initial negative impact on emerging market assets, sentiment would, in time, shift as emerging markets are viewed as an asset class that performs well when the global economy is doing well.
But he says the link has become "ingrained" since 2013.
Thomas Gehlen, market strategist at wealth management company Kleinwort Hambros, says if US interest rates happen at a time when market participants are concerned about the economic outlook, it can lead to increased volatility in markets, and in such circumstances the instinct of investors is to sell the most volatile assets first, and in an equity allocation this would be emerging market stocks.
