UK investors urged to consider emerging markets

An investment expert has suggested that UK investors should look emerging markets in Europe and across the globe to generate impressive returns during the economic slowdown.

Tim McCarron, the manager of Fidelity''s European Fund, stressed that investors should consider Russian companies in particular.

He explained that the high price of oil was boosting Russian stocks, making them attractive to UK investors.

"An example of a Russian stock I hold is Sberbank," Mr McCarron said. "The company is benefiting from its status as a leading domestic bank in a relatively under-penetrated market and is successfully meeting the needs of Russians, whose disposable income has increased."

Another investment opportunity that Mr McCarron tipped was Spanish telecommunications firm Telefonica. He said that the company had recently repositioned itself so that it now generates a significant proportion of its revenues from emerging markets, such as Venezuela, Mexico and Brazil.

He added that this meant Telefonica was "is a more lucrative opportunity than buying an emerging market company that is trading at a premium".

Mr McCarron concluded: "Indeed, Telefonica was valued at a price to earnings ratio of 10x at the end of April, a 39 per cent discount to the MSCI Emerging Market Latin American Telecommunication Services Index."