Headwinds coax investors towards EM

Baillie Gifford Global Income fund manager Dominic Neary believes emerging markets will grow in importance for income investors as the UK domestic market faces significant headwinds.

Neary’s Gifford Global Income fund, which transferred from a UK-focus to a global mandate this month, currently has just 22.5% exposure to UK stocks in his portfolio. North America is the largest weighting at 27%, followed by 18.6% for the emerging markets, 12.6% Europe ex-UK and 4.9% Japan. “We expect the biggest gains to be enjoyed by companies exposed to the developing economies of the world and the portfolio is tilted towards these and away from companies heavily reliant on UK consumers,” he says. Neary believes emerging markets are a particularly interesting area for long-term...