The emerging markets offer a wide range of opportunities for investors but at the same face their own series of challenges, according to a top asset manager.

Philip Poole, global head of macro and investment strategy at HSBC Global Asset Management based in London, visited Bermuda this week to make a presentation to global markets, asset management, Premier and private banking clients at HSBC Bermuda.

During the event he talked about everything from emerging markets, investment opportunities and challenges presented to global developments such as quantitative easing and their impact.

Mr Poole said that the world was in an ever-changing environment, highlighted by the financial crisis through the big increase in the debt load of the developed world, and reflected in both a fundamental structural and portfolio shift, as well as the cyclical effect from the monetary framework and policy of central banks in the West.

And he said that with low growth prospects for the developed world and money being pumped into the system, including $600 billion injection from the US Federal Reserve, a lot of the cash was flowing into the emerging markets.

"There have been a number of structural and cyclical changes and the net result is a lot of interest in these markets," he said.

Identifying the valuation of the emerging markets as an attractive investment proposition, particularly in countries like Russia which is fundamentally structurally sound and has a lot of potential for growth, Mr Poole said that their values had returned to those of 2004 levels, while the equity valuations between the developed markets and the emerging markets has closed.

Another factor going for the emerging markets, he said, was that as a market had matured over the past eight to 10 years with a shift from dollar denominated debt to local currency denominated debt as both domestic individual and institutional investors put greater faith in their own currency and foreign investors looked to access the market, many of whom's currencies are undervalued.

Citing the significant crises over the past two decades in his presentation entitled 'Opportunities and Challenges in the New World', Mr Poole pointed out that the merging markets had enjoyed a good economic period between 2002 and the start of the recession and as they tightened up their financial controls intervention in the developed markets pushed up their deficits and leveraged their debt.

He said the key for local investors was to diversify their exposure to different currencies in order to get a yield or appreciation on the upside.