Investors should look to emerging markets to help counter the negative demographic patterns emerging in the developed economies, according to Barclays Capital’s head of research, Larry Kantor.
Addressing the PortfolioConstruction forum in Sydney yesterday, Kantor said that demographic patterns had turned very unfavourable in developed economies, with ageing populations meaning economic growth was going to be lower for the next decade or two.
He suggested that to overcome this issue, investors needed to include emerging markets in their portfolios in circumstances where the demographic issues were not nearly as severe and where the fiscal problems were not so severe.
“Most of the emerging market budgets are actually in pretty good shape,” Kantor said.
He suggested that investors should also not be in the business of avoiding risky assets, even though volatility is high.
