In the video below, Morningstar's head of European fund research, Christopher Traulsen, takes a look back at the best performing areas of 2009, expresses his concern that investors' appetite for risk may bounce back too quickly in 2010, and discusses how to gain exposure to global emerging markets, among other topics.
In 2009, the best money was made in global emerging markets in a year that was the polar opposite of 2008, Chris tells CNBC's Squawk Box in an interview earlier this month. Among them, Russia funds achieved the strongest performance, followed by Brazil and Latin America funds, as well as Norwegian funds, which benefited from high exposure to local energy and banking stocks.
If investors want to gain exposure to global emerging markets, Chris highlights the importance of going for broader emerging markets funds rather than niche funds. First State Global Emerging Market, Comgest Growth Emerging Markets and Skagen Kon-Tiki are all broader GEM funds that have been awarded an Elite qualitative rating by Morningstar fund analysts--our highest qualitative rating.
Turning his attention to exchange-traded funds, Chris notes that the growing ETF universe is attracting a lot of assets. We think they're fantastic products--they're essentially cheap index funds--but we prefer the broader ETFs rather than the overly sliced 'n' diced versions.
When it comes to risk aversion, asked whether he thinks investors will ever fully regain their appetite, Chris says it's healthy that investors have had their risk appetite shocked into submission as investors had all but forgotten about risk ahead of the financial crisis. However, we're already concerned here at Morningstar that the investor's short-term memory will lead to funds being poured back into hot-performing areas and instead we believe key to successful investing is having a long-term attitude and a focus on asset allocation.
