Year 2012 will be a difficult one for equity investors: Fidelity Worldwide

The year ahead will be a difficult one for equity investors with the prospects for capital appreciation in most developed equity markets expected to be low, and the need to focus on the income-generating aspects of equities has never been greater, says Fidelity Worldwide Investment (Fidelity). Fidelity Global Chief Investment Officer, Equities Dominic Rossi says while emerging markets will not be immune from eurozone-inspired volatility, their attractions will become more conspicuous as the developed world’s problems are laid bare during the final, volatile phase of the sovereign debt crisis.Economic weakness and financial contagion in Europe will inevitably impact global growth. However, Fidelity does not see a slowdown in emerging markets as a big concern because these markets face inflationary pressures to which slower growth is a partial solution. This allows monetary policy in emerging markets to become more accommodative. While the prospect of capital appreciation is very low in developed equity markets, Rossi believes opportunities exist in income and in emerging markets.