Templeton Asset Management executive chairman Mark Mobius said he would not recommend Australian investors be exposed solely to emerging markets within the international equities component of their portfolio.
"I wouldn't recommend it," Mobius told investors and financial advisers at a Templeton conference in Sydney yesterday.
"Frankly speaking ... you should not restrict yourself to one area, one category or one class because the winners will move from area to area and subject to subject."
His comments came even as Templeton in 2010 expects about 4 per cent-plus gross domestic product (GDP) growth on average for emerging markets, compared with approximately 1 per cent for developed markets.
"The valuations in some of the developed markets today are lower than emerging markets. So there's going to be an opportunity to find terrific bargains in the United States, Europe and other parts of the developed world," Mobius said.
"So I would say you have to keep a balance and yes, get the exposure to emerging markets.
"And as I mentioned 20 per cent is not a bad exposure ... but make sure you get that global exposure as well."
Mobius said Templeton had two main themes in its emerging markets portfolios - consumers and commodities.
"We believe in emerging market consumers for one very important reason - there are more of them," he said.
"In India and China you have over a billion people each, far more than the European Union and the US, and then you have countries like Brazil and Russia, other countries that have pretty big populations.
"And as I travel around the world I see more and more shopping malls. The whole retail trade is being modernised in these countries."
Templeton believes commodities are going to continue an upward trend going forward and the amazing thing about emerging countries is they are being transformed from commodities exporters to importers, Mobius said.
