Jeremy Tigue, the trust’s fund manager, said: “At a macro level, emerging markets are growing faster than other markets, yet because they’ve had a torrid time in the past, valuations remain low. But risk is less now than in the past, these countries are less dependent on external capital and companies have become much more shareholder-friendly.”
 Mr Tigue is particularly keen on Asia, where he says countries are becoming less dependent on exports and the growing middle classes are spending more in the services and retail sectors.
 The trust returned 17.4 per cent last year, which was just behind its benchmark. Mr Tigue is hoping for a higher return this year, but conceded that month-to-month performance could now be more volatile.
 Stuart Richards, fund manager of Baring asset management’s Emerging Europe fund, which returned 18 per cent for the year to the end of February, made the case for emerging European equities. He cited the strength of the Russian economy and low equity valuations there.
 He said that 2004 had been blighted by the Yukos affair, but he hoped for an improvement in politics and corporate governance this year. Turkey’s efforts to join the EU would make it an attractive proposition, while those that have already joined – contrary to what some commentators say - would continue to offer opportunities. “Before they joined, these countries got average flows of €2.2bn from the EU. Now that will go up by nearly €10bn, which alone adds 1 per cent to GDP.”
 He anticipated a wave of outsourcing to central Europe among western European firms and pointed to Lego’s recent decision to move production from Denmark to the Czech Republic.
 SG Asset Management has expressed “exasperation at the continued pessimism that surrounds western Europe”. SG fund manager Matthew Leeman said few markets could match the strength or price of many of the region’s stocks. RM

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