Gartmore’s Leigh Himsworth warns investors are in danger of being sucked into the emerging market story without properly considering asset valuations.
The head of UK equities says the risk to investors is getting caught up in the excitement of the emerging theme, rather than maintaining focus on valuations.
"Whilst Far Eastern economies may well prove to be the engine for growth into the foreseeable future, we must be wary of being ‘sucked-in' to this trade and being ‘swept along' with the rest of the investment community," says Himsworth.
In addition, Himsworth says given the uncertainty of the outlook for 2010 and the lack of discrimination within asset classes and sectors, he is keeping sector weighting fairly neutral and concentrated on identifying value at a stock level.
"The market movements of the past weeks suggest to me we are in the process of seeing a change of leadership," he adds.
"While some cyclical sectors, like mining, have continued to climb, others have levelled off. There are also stirrings in some of the defensive sectors that have been weak during this year's rally.
"Our aim is to remain vigilant and to identify value opportunities, often in less fashionable areas, perhaps in more UK consumer-focused areas, as these may become ‘oversold' in the stampede for overseas earnings."
