Financial stocks in emerging markets could score a win for investors, according to UBS global emerging markets head Geoffrey Wong.

Countries such as India, Indonesia, Brazil, Mexico and Russia offer opportunities in that sector, said Wong, speaking at a media event Thursday. Wong is the manager of the UBS Global Emerging Markets Opportunity fund. 

'These are countries where in addition to the high GDP growth which you expect from emerging markets, credit to GDP is still very low, so [financials are] undervalued.'

The Citywire AA-rated manager added that investors can score a double win as GDP per capita and credit per person in these countries increase.

While the 2016 rally in EM stock marked the start of an upturn for the sector, not all countries offer upside.

Wong is neutral in China, and very underweight on the country's 'old' economy manufacturing companies that have borrowed heavily to finance infrastructure projects and are growing at a 0% to 5% rate.

However, he’s more positive on the Chinese services sector, which has churned out growth rates of up to 15% per year, said Wong, who also oversees Asia Pacific equities.

Wong isn’t concerned about a potential slowdown in global trade because emerging markets have started trading with each other rather than with developed countries such as the U.S.

‘The fact that trade is no longer growing as fast as it was is a fact of life,’ Wong said. 

Debt deals

On the fixed income side, countries offering opportunities include Brazil, Russia and Argentina, global head of emerging market debt Federico Kaune said.

Inflation rates are falling fast in these three countries and they still have high nominal interest rates, he said.

Plus, Brazil's government has been cutting interest rates over the last few months, with the latest cut of 100 basis points on Wednesday bringing the benchmark rate to 11.25%.  That has pushed the country out of the very high yield space and into more stable territory, he said.

Kaune also expressed support for EMD corporates.

‘Many people think these corporates are a lot riskier than they actually are,” he said, adding ‘These countries have really changed. These countries have matured.’