Emerging markets could continue to offer investors good returns in the future, despite the chance of a higher volatility and risk.

That is the view of Edward Bonham Carter, CEO of Jupiter Investment Management Group Ltd., which has an operation in Bermuda, who was talking about the impact of the economic downturn on business, the subsequent recovery and future outlook of the markets.

Mr. Bonham Carter said that companies are now being valued on their individual characteristics and growth prospects rather than their sector to the benefit of equity and bond market stock pickers and equity income funds, which have tended to invest in solid companies that can self-finance growth from strong balance sheets and therefore continue to pay and grow their dividends.

"While growth in the West is expected to remain muted as developed economies continue to struggle to reduce government, household and consumer debt, emerging markets could continue to offer investors comparatively attractive returns, albeit with the possibility of greater volatility and often higher risk," he said.

"Many emerging markets have sought to keep their economies growing in the global downturn by boosting domestic demand and investing in infrastructure. This and longer-term secular growth patterns should help maintain strong GDP growth in these countries."

Mr. Bonham Carter said that despite the finances of many fund management companies being linked to the level of stock market indices and thus the downturn inevitably having an effect on the sector as a whole, Jupiter continued to perform very well during the recession, with its strong brand and client relationship meaning fund inflows have stayed positive on a net basis and performance has also remained good. As a result, he said, his company's funds under management were close to their pre-downturn, peak levels.

He added that the company's inflows had strengthened as stock markets and the economic outlook improved, with a continual focus on maximising returns for investors through successful stock picking, particularly important given the events of the past couple of years.

From a strategic point of view, Mr. Bonham Carter said that Jupiter had continued to work on growing its market share in UK retail sales — the company's core market, and developing other areas of its business where it sees strong growth potential, such as private clients, international sales and institutional business.

He foresees a period of low economic growth in which stock markets trade within a limited range without any clearly-defined direction — what he refers to as a "hippo" market.

"But while the market as a whole may not make the kind of progress we saw in the 2009 cyclical-led rally, experienced and skilled fund managers can continue to identify opportunities that produce attractive returns for their clients over the medium-term," he said.

"Current market conditions favour the sort of careful stock-picking approach we apply at Jupiter and certain good quality companies should able to continue to generate healthy returns despite a backdrop of weaker growth."