UK and US gain favour but Asia still top of the polls for investors

Investors are still keenest on Asia and emerging markets, but the UK and North America have gained favour over the past year, according to a new survey.

Asia (excluding Japan) was once again the most popular choice, with 39.5% of respondents choosing it as the region likely to do best, largely unchanged from the 41.7% score that also placed Asia top of the poll in November 2009.

A further 14% of respondents at the F&C Investments’ latest Question of the Month survey back Latin America, with the 9% who chose the ‘other’ option unanimously backing emerging markets. This again is broadly in line with the 2009 survey, when there was a single ‘emerging markets’ answer option that drew 25% of the vote.

However, where the two surveys really diverged was in their view of prospects for more developed markets. Of December’s respondents, 16.3% backed the UK, up from 5% a year earlier, while North America saw its share of the vote soar from 1.7% to 11.6%.

Support for Europe, excluding the UK, waned from nearly 12% to 7%, while Japan fell even further from grace, with just 2.3% backing it to perform best, compared with a still paltry 6.7% in the 2009 survey.

Asian and emerging markets continued to do well in 2010 in spite of fears of a bubble, which have so far proved overdone. However, the UK built on a strong 2009 with another good performance in 2010, with the FTSE 100 Index of leading shares reaching 6000 points around Christmas, a level not seen since 2008. Already some commentators have suggested that 2011 might be the year that sees the FTSE surpass its December 1999 record high of 6930.

Whichever area of the global stockmarket does best in 2011, investors will be able to access it through one of F&C's range of investment trusts, which includes everything from the globally diversified Foreign & Colonial Investment Trust (which itself has a higher than average weighting to emerging markets) to the very focused F&C US Smaller Companies or Investors Capital Trust, which has a bias towards income-focused UK blue-chips.

‘It is interesting to see investors feeling a little more bullish about the US and UK, although perhaps unsurprising that Asian and emerging markets continue to be the most hotly tipped. Investors seem to have all but given up on Japan, which paradoxically might make it one to watch, although Japan has had more than its share of false dawns over the past 20 years,’ said Mike Woodward, head of Investment Trusts at F&C Investments.

Picking up on the strong recent performance of the FTSE 100, January’s Question of the Month seeks investors’