Fund for 2023: 15 wealth managers reveal their top picks

Wesley Wilkes, managing partner & investment director, Iron Market

My pick would be the First Trust Emerging Market AlphaDex ETF for 2023.

We believe, as seems consensus now, that 2023 will bring a global recession. However, it is the severity and sequence of that which is both unclear and creates tactical opportunities for us.

Emerging market (EM) equity valuations are extremely depressed, and we think they will rerate over the next year as global inflation falls, policy tightening pauses and the US dollar ultimately peaks. Meanwhile, EM economies are likely to prove relatively resilient to the downturn and we see the EM versus DM growth gap widening in 2023.

China usually carries a significant weight to most EM allocations and there are downside risks to that, but we expect an unusually wide divergence in growth and inflation across EM economies.

In the First Trust AlphaDex ETF, we couple EM allocation and exposure with what we may see as a goldilocks period for factor investing. So, this is an allocation that gives us the EM exposure we require, with a factor methodology that we hope may capture some of those expected divergences within the EM space.