Prudential Financial Inc., the insurer that manages more than $1 trillion of investments, is set to commit more funds to emerging markets after the sector’s main index slumped and developed-country stocks rallied.
“I’ve got that itchy trigger finger,” Ed Keon, a managing director and investment manager at Prudential’s Quantitative Management Associates (QMA), said yesterday in New York. “I wouldn’t be shocked if our next move in emerging markets was to be a buyer before this year is out.”
The Standard & Poor’s 500 Index advanced 30 percent last year as the MSCI Emerging Markets Index lost 5 percent amid concerns that higher interest rates could derail growth. The gauge of emerging stocks trades for 11.5 times reported earnings, the cheapest relative to U.S. equities in five years.
“Investing when things look rough, that’s when your opportunities for upside are greater,” Keon said at Prudential’s 2014 Global Economic and Retirement Outlook briefing.
The MSCI gauge includes companies from 21 countries such as Brazil, South Africa, Turkey and China. Samsung Electronics Co., the world’s biggest maker of smartphones, and Naspers Ltd., Africa’s largest media company, are among its holdings.
QMA, a unit of Newark, New Jersey-based Prudential, oversees more than $100 billion for clients such as endowments and pensions using mathematical models to invest funds.