Tendai Musikavanhu from Old Mutual Global Index Trackers, a sponsor at the marcus evans Emerging Market Investments Summit 2010, on emerging market investments.  

Interview with: Tendai Musikavanhu, Chief Executive Officer, Old Mutual Global Index Trackers

FOR IMMEDIATE RELEASE

Institutional investors may need to overcome their perceptions on investing in emerging markets, according to Tendai Musikavanhu, CEO of Old Mutual Global Index Trackers. Most of the opportunities there are still undiscovered and could prove to be profitable. A sponsor at the marcus evans Emerging Market Investments Summit 2010 taking place in Monaco, 13 – 15 June 2010, Musikavanhu discusses the perceptions around emerging market investments and the opportunities that lie within.

What are the challenges facing emerging market investors at the moment and what solutions would you recommend?

Tendai Musikavanhu: Many investors have negative perceptions and fear around investing in emerging markets. A lot of investors, especially in the US, are heavily weighed toward American assets, with about 83 per cent of their investments locally and only five to ten per cent - or even lower - in emerging markets. Many US and European investors have a perception of emerging markets as high-risk high-return and that equities in their own countries are a safer bet.

Whilst America has been one of the world’s truly great success stories, looking into the future, I would be surprised if we continue to get the same scale of growth in the next 50 years that we have had in the last 50 years. There is a pendulum swinging towards some exciting emerging markets.

Another issue concerning institutional investors is the number of investment professionals that put themselves out as emerging market experts. From my experience, nobody can ever be an emerging market expert from an investment standpoint. Many investors rely on these professionals but do not get full value for their money; the most anyone can ever be is a regional emerging market specialist or a country expert.

What long-term strategies would you recommend to emerging market investors?

Tendai Musikavanhu: Diversification is the game. There are several risk factors involved when investing in emerging economies; therefore investors need to make sure they are not too overly weighted to one region. Investors should be honest with themselves as to what they are trying to achieve – if they are looking for exciting growth, they could try their best to capture that by having a core or satellite investment approach in a well-diversified benchmark. 

People often say that emerging markets are inefficient and that people can create alpha by finding the investment information that no one else can. The reality is that they are inefficient for a reason. There is very poor information available on emerging markets from a desktop in London. Thus, I would advise investors to work with regionally based investment houses or advisors with a proven track record and go with those with proven strategies and regionally planned investments.

What are the some of the most promising areas to invest in?

Tendai Musikavanhu: One of the really exciting things about emerging markets is that a large part of the opportunities have not been fully discovered yet. The private equity multiples of many emerging markets is extremely attractive. I do think that emerging markets as a whole are very exciting and attractive, but if asked to emphasise any specific areas, I would encourage investors to look into countries that continue to invest in their infrastructure; China, the Gulf countries and South Africa are a few with good budget allocation on infrastructure.

Investors are also beginning to invest a small percentage of their funds into frontier markets which are considered high risk countries. I am hoping that they begin to allocate even more into these markets and look for some of the untapped opportunities within. In the 40s and 50s, investing in equities was considered as high risk as the way we consider certain hedging and derivative strategies today. I would encourage investors, especially in the US, to begin to see that there is an exciting world out there that they could invest in. There may be some risks, but like with all other investments, returns could exceed the risks taken.  

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About the Emerging Market Investments Summit 2010

This unique forum will take place at the Le Méridien Beach Plaza, Monte-Carlo, Monaco, 13 - 15 June 2010. Offering much more than any conference, seminar or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on strategic emerging market institutional investing techniques, optimising returns, sovereign debt screening and the forecast for the future. 

For more information please send an email to info@marcusevanscy.com or visit the event website at http://www.emisummit.com/TendaiMusikavanhuInterview

Please note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-to-one business meetings. For more information, please visit http://www.marcusevans.com

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About Old Mutual Global Index Trackers

Old Mutual Global Index Trackers (OMGxT) is an SEC registered adviser with its fund management based in Johannesburg, South Africa. OMGxT specializes in Global Passive Fund Management ex US, and is the first emerging market firm to list a broad based emerging market ETF on the New York Stock Exchange. The firm manages broadly diversified FTSE index tracking funds called GlobalShares. North American operations are based out of the Boston, Massachusetts office. More information on GlobalShares can be found at www.globalsharesetf.com

OMGxT is one of several investment boutiques within the Old Mutual Investment Group, a wholly owned subsidiary of Old Mutual plc, an investment group with more than $450 billion in assets under management worldwide. Founded in 1845, and now based in London, the group operates in 38 countries and employs 57,000 people.

For More Information Contact:

OMGxT US at 1-888-OMGxTUS (+1 (888) 664-9887) +1 (888) 664-9887

Before investing you should carefully consider the Funds’ investment objectives, risks, charges and expenses.This and other information is in the prospectus, a copy of which may be obtained by calling +1 888 OMGXTUS (+1 (888) 664-9887) or by visiting our website www.globalsharesetf.com. Please read the prospectus carefully before you invest.

Foreside Fund Services, LLC is the distributor for the Funds for the United States only.

An investment in Funds is subject to investment risk, including the possible loss of principal amount invested. Fund returns may not match the return of their respective index, known as non-correlation risk, due to operating use of sampling techniques, derivatives and expenses incurred by the Funds.  Foreign or emerging market securities involve certain risks and increased volatility not associated with investing solely in the US. These risks include currency fluctuations, economic or financial instability, and lack of timely or reliable financial information. The Funds may also invest in small and medium sized companies which involve greater risk than is customarily associated with investing in more established companies.

Risk is inherent in all investing. An investment in the Funds involves risks similar to those of investing in any fund of equity securities traded on an exchange. Even if the Funds achieve their objectives, the value of the Shares may decline, more or less, in correlation with any decline in value of the Underlying Index. Overall stock values could decline generally or could underperform other investments. The Funds may not be fully invested at times, for reasons such as a result of cash flows into the Funds or reserves of cash held by the Funds to meet redemptions and expenses. The Funds’ Shares will change in value, and you could lose money by investing in the Funds. The Funds may not achieve their objectives.

Alpha is the difference between a fund’s actual returns and its expected performance, given its level of risk as measured by Beta.