IFA of the year: Emerging markets help IFA competitors escape the doldrums

THE 2010 IFA of the Year competition has reached its climax and our advisers can feel relieved that they didn't encounter the shocks that shaped the previous contest.

Our 2008 competitors had to negotiate not only nerve-testing market volatility but a near-collapse of the banking system. This time around has been far less eventful, despite some market turbulence last year and the fallout from various sovereign debt crises, but no one was complaining. All IFAs recorded decent gains, whereas our winner in the previous competition was the one who best minimised the losses suffered.

Unsurprisingly there were notable differences in asset allocation, with emerging markets and global funds prominent, and markedly less investments in the UK and Europe. China overtook Japan to become the world's second largest economy in GDP terms in the first half of last year. And while volatility remains, and investors in China and other emerging markets have to accept periodic corrections, investors and IFAs are becoming increasingly sophisticated in the way in which they get exposure to emerging markets.

The Investment Management Association this week revealed that sales of commodity funds reached a record high in November last year. The surge reflected not only rising commodity prices, but also the fact that people are getting into sectors such as commodities for another way into emerging markets.

Emerging markets was the biggest-selling fund sector in November, its highest sales month on record. Emerging markets will almost certainly be an even bigger feature of our next competition - and with experts warning of a significant correction over the coming year, it's the only feature we can predict with any degree of confidence.