IFAs (Independent Financial Advisers) are taking a bullish outlook towards Emerging Markets after growing sceptical about the prospects of UK shares, according to Virgin Money’s Investor Intentions Index.

In its latest index, 42 per cent of IFAs are feeling optimistic about Emerging Markets, compared to 32 per cent three months ago, while a quarter of IFAs are now feeling confident about the Far East – representing an increase of four per cent in the last quarter.

In contrast, UK shares have seen their popularity fall as a growing number of IFAs become concerned about the UK’s economic recovery. In the past three months, the percentage of IFAs feeling confident about this sector has decreased by seven per cent to 23 per cent.

Year on year figures show a marked turnaround for the Emerging Markets sector considering this time last year only a quarter of IFAs felt optimistic about this sector, compared to UK shares which had the backing of 39 per cent of IFAs.

Commenting, Grant Bather, Virgin Money spokesman said: “The MSCI Emerging Markets index has returned 57 per cent in the past year and while some commentators are concerned about a bubble in the traditional emerging markets such as China and India, advisers are still more optimistic about the sector than any other.”

However, despite an increasing number of IFAs feeling negative towards UK shares, 74 per cent are still advising their clients to invest in this sector, while a further 73 per cent are advising them to make an investment in the Far East and Emerging Markets.  

Unsurprised by these findings, Mr Bather added: “Clients will always be more likely to invest in UK shares than other markets but it is clear that optimism about the performance of the UK is low among advisers. The Far East and Emerging Markets are regarded as better bets for outperformance in a year which will see a UK election and the uncertainty that causes.”

© Fair Investment Company Ltd