Adviser panellists for Financial Express' Adviser Fund Indices (AFI) recommended that aggressive investors boost their exposure to Asia and showed a strong preference for emerging market funds.
In the latest six monthly rebalancing of the AFI Aggressive Index, exposure to Asia Pacific equities was increased by 5% to 21%.
First State Asia Pacific Leaders remained the most popular fund for aggressive investors and Aberdeen Emerging Markets took second place. Of the 103 funds suggested by panellists for aggressive investors, 17 (or 16.5%) were emerging market or Asian funds.
Remaining funds within advisers' top five adventurous picks were Schroder UK Alpha Plus, AXA Framlington UK Select Opportunities and GLG Japan Core Alpha. Some of the more exotic recommendations for aggressive investors included Allianz RCM Global Eco Trends, Baring German Growth, JPMorgan Global Consumer Trends and Martin Currie China, the latter being the index's highest ranked new entrant.
Financial Express calculates three AFI indices - Cautious, Balanced and Aggressive - by collating fund and asset allocation recommendations from 17 leading UK investment advisers. The indices are rebalanced twice a year and this latest review, effective May 1 2011, marks their 14th season.
The AFI Balanced Index was topped with Aberdeen Emerging Markets, while the most popular pick for cautious investors was M&G Optimal Income. The AFI Balanced and AFI Cautious Indices shared the same second and third choices: L&G Dynamic Bond and First State Asia Pacific Leaders.
For cautious investors, fixed interest exposure was increased by 4% to 41%. Meanwhile, three out of the top five picks in the AFI Cautious Index were income funds: M&G Optimal Income, Schroder Income Maximiser and Artemis Income. When selecting products for cautious investors, advisers turned to M&G's stable of funds with M&G's Property Profile, Strategic Corporate Bond, Global Dividend, Recovery, America, Global Basics and UK Inflation Linked Corporate Bond funds all included in the AFI Cautious Index. No provider achieved this level of penetration in the Aggressive or Balanced indices.
The best performing funds in the indices for the three years ended 1 May 2011 were:
AFI Aggressive Index Close Special Situations 92.48%*
AFI Balanced Index Investec Emerging Markets Local Currency Debt 67.28%
AFI Cautious Index Investec Global Gold 56.57%
Michael Holland, Managing Director of Financial Express, said: "The swing towards emerging markets, in particular Asia, shows how investors and advisers alike are willing to take a greater risk at the moment to find both income and growth. However they are turning to familiar names to invest their cash, suggesting they are seeking the security of well known houses and a safe pair of hands."
*performance numbers are aggregate total returns over the three years.
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