The West could struggle while Asian markets boom

Investors have been fleeing emerging markets wholesale for the 'safe havens' of the West. But this may be a mistake. With developed and emerging markets at different points in the business cycle, a mix of Western blue-chips and Asian small-caps could give you the ideal portfolio, says Cris Sholto Heaton.

Investors have been fleeing emerging markets for 'safe havens' indiscriminately of late. But they've been seeking a strange sort of safety. They certainly don't seem to be seeking out the most dependable assets judging by recent performance.

In the US, the Russell 2000 benchmark for smaller caps has fractionally beaten the S&P 500 this year, by 5% to 4.85%. The S&P 'low quality' index has beaten its 'high quality' sibling by 5.7% to 3.7%.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.