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Schroders: investors look to equities
26 February 2014
Report reveals dramatic increase in investor confidence in developed markets
Investors plan to turn to equity markets in their search for
growth this year, according to a new report by Schroders.
Some 70% of investors globally said they were looking to invest
in equities, while 82% said they were seeking to maintain or
increase the amount they invest and save in 2014.
In comparison just 18% will look to invest in fixed income, and
8% said they would keep money in cash.
The report findings come as no surprise given that the bond
markets have had a rocky ride on the back of concerns over
tapering of quantitative easing in the US. Dwindling interest
in fixed income has led to growing investor appetite for
Investors globally are looking to invest in developed economies
as these are perceived to provide more stable returns and the
best growth opportunities, according to Schroders. Confidence
in developed markets has spiked since the asset
manager’s 2013 report, with 27% of investors now
looking to Western Europe, and 31% expecting the US to provide
strong growth prospects.
Emerging markets on the other hand have seen outflows of
capital as US tapering draws investors back into the US
While Asia Pacific – including Japan - is still the
top region for investors in terms of expectations of strongest
growth, with 39% preferring the region, this is a 7% decrease
from last year.
Massimo Tosato, executive vice chairman, Schroders, said the
trend towards equities is not without challenges in 2014.
"Despite positive news from some countries, global GDP growth
remains lower than expected, when compared to recovery rates
from previous recessions. This growth will not be uniform
across sectors, economies or regions, particularly given that
significant weakness remains in some Eurozone countries, and
also in emerging markets where the withdrawal of QE is weighing
heavily on stock markets. We are in a still transitioning
global economy and taking an active investment approach remains
key for investors."
Fewer investors (41%) plan to buy equities in their home
countries this year, while the majority are looking outside
their domestic markets. Half of last year’s
respondents were looking to invest in their home markets.