Investors must adjust their asset allocation and investment strategies in line with global trends, including a renewed focus on opportunities in emerging markets, particularly Brazil, Russia, India and China (BRIC) countries, said a banking expert.

Gary Dugan, chief investment officer of the private banking unit at Emirates NBD, pointed out that the BRIC had experienced a relatively limited impact as a consequence of the financial crisis.

Dugan was speaking at the recent 'Private Banking World Middle East 2009' conference in Bahrain.

'The investors must appreciate the increasing importance of emerging markets at a time when “a number of BRIC countries soon will no longer be considered ‘emerging markets’ but core components of the global financial market,” he stated.

Addressing an audience of regional and international investors and financial services decision-makers, Dugan insisted that the recent correction in the global economy reflected a range of underlying trends, such as lower inflation, slower population growth rates in the developed world, limited increases in productivity and expected long-term nominal global GDP growth.

Many investors, according to Dugan, failed to recognise that the previous performance of some of their investments was based on financial engineering, rather than these factors underlying the performance of the real global economy.

Calling for an end to “illusions about what the global economy can deliver in terms of long-term growth and therefore asset-class returns,” he said that future portfolios “should include a natural balance of high-quality bonds and equities.”

Dugan reinforced his emphasis on emerging markets, adding that for investors, “Some of the emerging markets will receive much higher weightings in investors’ portfolios, in line with the increased convertibility and credibility of their currencies.”

Jamal Bin Ghalaita, Group deputy chief executive officer, Emirates NBD, said the participation of Emirates NBD, the Middle East's largest bank by asset size, in 'Private Banking World Middle East 2009' comes in line with the bank’s enhanced focus on private banking services, especially during a period when capital preservation and growth has never been more critical to the bank’s clients.'

“Emirates NBD is not only focused on strengthening further its own range of private banking products and services, but also on participating in an industry-wide dialogue about the outlook for asset allocation in the post-crisis world,' he added.-TradeArabia News Service