Mark Mobius is one of the best-known emerging-markets fund managers. He’s spent most of his 40-year career at American fund manager Franklin Templeton, where he oversees around $40bn in assets as chairman of Templeton Emerging Markets Group.
Templeton’s funds have had a tough few years: the flagship Templeton Emerging Markets Investment Trust (LSE: TEM) is down by around 25% in terms of net asset value over the past five years, compared to a 10% fall in the MSCI Emerging Markets index. However, Mobius remains upbeat.
There is “maximum pessimism” around Asia and emerging markets at present, which isn’t justified by the fundamentals. Growth is decelerating in China, but the country is still an “enormous growth story” as the focus shifts from manufacturing to services. Meanwhile, India’s economy continues to expand strongly and commodities prices are bottoming out.
Yet global fund managers remain underweight emerging markets; as they start to return, markets could jump sharply. Many emerging-market currencies are also undervalued, suggesting that overseas investors should benefit from currency appreciation. This makes Brazil, Malaysia and Vietnam attractive options.