Although there has been a substantial sell-off of the likes of China after a short-term period of underperformance, Smith still thinks that valuations are better elsewhere.
"We are currently underweight all the BRICs except Russia," said Smith, who manages the Ignis Global Growth and International Emerging Markets Select Value funds. "In our view, China is still not good value even though it is less overbought than it was."
Smith is not overly bullish on Russia, and accepts that it may be a candidate for profit-taking in the near future, but he thinks valuations are vastly superior to those offered in the other BRIC countries.
"Last year Russia was a screaming buy on valuation grounds, although it is now less so," he explained. "Nonetheless, it is possible to buy stocks in Russia trading on P/E ratios of around seven-to-eight times earnings – this is still very cheap, although they have risen recently due to higher energy prices."
The manager is more optimistic on the prospects for emerging economies in Eastern Europe, and has a high exposure to the region: he has an overweight position in Poland and the Czech Republic of 5.2 per cent and 5.3 per cent respectively.
According to FE Analytics data, the MSCI Russia, Poland and Czech Republic indices have substantially outperformed the MSCI BRIC index over a one-year period.
Performance of indices over 1-yr
Source: FE Analytics
Although Smith believes China is more attractively valued than it was 12 months ago, he has retained his underweight position. Since the turn of the year, all 27 funds in the IMA China/Greater China sector have lost investors money.
"While we believe China will have a soft rather than hard landing, for now there are better opportunities elsewhere," he continued.
"For value investors like us, the sweet spot comes when the prospects for corporate earnings growth look good at the same time that valuations are cheap."
"This is not the case for Chinese companies, which remain overvalued on the whole."
Smith has a 2.5 per cent underweight position in China in his emerging market fund, though this has come down from 10 per cent in 2010.
Elsewhere, the manager has minimal exposure to India, but is cautiously decreasing his underweight position in Brazil.
"Brazil is a market to which we have increased our exposure recently to a small underweight. As with China and India we recognise the long-term growth potential for Brazil, but quite simply the market had got ahead of events and stock prices were too high for our liking."
Performance of manager vs peer group over 5-yrs
Source: FE Analytics
According to FE Analytics data, James Smith has underperformed his peer group composite by 8.54 per cent over a five-year period.