According to the latest Barings Investment Barometer, 61% of financial advisers believed increased exposure to emerging market equities was needed, an increase of 19% since September’s barometer.

Asian equities (ex Japan) was the second largest sector where financial advisers believed their clients needed more exposure, at 55%, up 14% since September.

Over a quarter (29%) of financial advisers are now ‘very’ favourable to UK equities (up by 6% from September’s barometer). However, they are also concerned about UK economic growth, as 31% rate stagnant or negative UK GDP as the biggest macro-economic challenge to investment growth in the next six months.

The biggest shift in financial advisers' sentiment was in emerging market debt, which increased by 12% since September’s barometer to 21%. This was followed by the natural resources/commodities asset class (up by 9% to 16%), European equities (up by 9% to 18%) and US equities (up by 8% to 31%).

In contrast, cash fell in popularity by 1%, with just one in 10 financial advisers claiming they were ‘very’ favourable towards the asset class.

Barings head of UK retail distribution Rod Aldridge commented: “Emerging market and Asian (ex. Japan) equities have remained robust in the face of extreme uncertainty. However, there is also a clear shift in sentiment towards emerging market debt and European and US equities, signalling greater interest from financial advisers in diversifying into more asset classes in the pursuit of growth and market opportunities.”

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