BERLIN (Reuters) - Aberdeen Asset Management Chief Executive Martin Gilbert said emerging markets continue to be "unloved", in spite of this year's rally, with very few investors putting fresh money to work.
Speaking on the sidelines of the Fund Forum conference in Berlin, Gilbert said much of the rally was instead down to investors ditching "short" bets that the market would fall further and buying to cover their positions.
"It's an unloved rally, no one's putting huge amounts of money in," he said.
"The only people putting money into our funds are putting it in for the medium to long term."
Emerging market stocks have rallied more than 10 percent in the past three months.
Looking ahead, Gilbert said the rally would gather momentum, but "very slowly" as investors remain concerned about the impact of U.S. monetary policy and still-weak growth on their holdings.
"If you think that interest rates in the U.S. are not going to go up too rapidly, then emerging markets are probably a reasonable place to be, because the currencies were so knocked."
U.S. nonfarm payrolls data on Friday showed the slowest job growth in more than five years, quashing expectations for a near-term U.S. interest rate hike.
In addition to long-favoured but expensive India, Gilbert cited good opportunities in Indonesia, Malaysia and Thailand in both equities and local currency debt.
Gilbert said the world remained a "fragile place" and the biggest danger was that markets were under-pricing the risk of weak global growth.
Aberdeen saw total outflows of 16.7 billion pounds ($24.1 billion) in the six months to the end of March.
Gilbert also said oil's price drop in the past year had driven sovereign wealth fund money out of emerging markets. [O/R]
"With us, sovereign wealth funds have gone from 10 percent of AuM (assets under management) to 3 percent."
($1 = 0.6921 pounds)
(Reporting by Simon Jessop; Editing by Carolyn Cohn and Alison Williams)
