Young Fundpicker: Seeking opportunities in Asian income

Outperformed Europe, UK and Japan

clock • 4 min read
Joe Young of Rathbones
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Joe Young of Rathbones

When investing in any equity market, we take a long-term view (five-to ten years), and since 2002, Asia (ex-Japan) has generated significantly higher annualised returns than Europe, the UK and Japan - yet with similar risk.

These results can change depending on the time range, but history suggests emerging economies typically compensate investors with higher albeit more volatile returns. Asian equities can also act as an important diversifier. Investment Conundrums: China is going 'the other direction' Take the two portfolios below, rebalanced daily, with only Portfolio B containing exposure to Asia. The exposure in Portfolio B has improved long-term risk-adjusted returns but, importantly, risk has fallen more. This makes sense as the Asia allocation will have a different mix of risk and r...

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