Tue, Mar 31, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Eurozone debt crisis remains top concern of investment professionals - Barings

Wednesday, February 02, 2011

Rod Aldridge
Opalesque Industry Update - The Eurozone debt crisis is considered by investment professionals to be the most significant threat to investment growth over the next six months, with over two thirds (68%) citing it as one of the biggest Global macro-economic investment challenges, according to the Barings Investment Barometer1. Just 46% considered this a significant challenge in the last quarterly survey2, demonstrating that the Irish debt crisis and worsening situation in Portugal have renewed concern amongst the investment community for Eurozone stability.

The barometer, that explores intermediary attitudes towards the current economic environment and outlook as well as opinion towards the various asset classes (full results below), also found that concern for inflation is growing, with 32% saying that it is a significant challenge to investment growth. This up 14% on the last survey. A majority (74%) of investment professionals also say that their clients are concerned about the impact of inflation on their cash investments, and 86% say their clients have already, or plan to, reallocate cash investments to inflation protected assets. Reflecting this, cash is the least favoured asset class with 80% finding it unfavourable.

The prospect of a second banking crisis is more of a concern than it was three months ago (18% up to 30%) but much fewer are concerned about a double dip recession, with 7% considering this a threat to investment growth compared to the previous figure of 21%.

To help their clients through the current market volatility, 73% of advisers are encouraging greater diversification of assets. This is an increase on the last poll when 61% said they were doing this. Now, almost half (49%) of advisers are also recommending clients conduct more regular reviews of their investment portfolio.

Rod Aldridge, Head of UK Retail Distribution at Barings comments: “Market volatility continues to be at the forefront of investment advisers’ minds, especially with mounting concerns over the Eurozone. It is good to see that investment professionals are placing such a great focus on diversification and the regular review of their clients’ portfolio to best mitigate the risks of volatility.”

In terms of asset class favourability, emerging market equities and Asian equities (excluding Japan) remain at the top of the leader board in the ranking of investment professionals’ most favoured asset classes (with 95% favourable to emerging market equities and the same number favourable to Asian equities - excluding Japan). The barometer also shows that about two-thirds (63%) of investment professionals are encouraging investors to increase their allocation to emerging market equities and half (50%) believe investors should be increasing exposure to Asian equities.

Nearly two thirds (66%) are advising clients to decrease exposure to fixed income, more than any other asset class. This is an increase on the last survey when just over half (53%) where advising this.

Rod Aldridge comments: “It is encouraging to see that emerging market equities continue to be a most favoured asset class. We strongly believe that conditions for investing in emerging markets are attractive as they remain fairly valued with positive prospects for investment return. “

Source

kb

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. Other Voices: The role of diversification in CTA portfolios[more]

    2014 brought a resurgence of managed futures strategies, or CTAs, which performed very well as a whole, outperforming all other hedge fund strategies. However, a closer look reveals that there was a wide range of performance, or return dispersion, across managers. The bottom line? Not all CTAs

  4. Neuberger Berman unit buys 20% stake in activist hedge fund Jana Partners for $2bn[more]

    Komfie Manalo, Opalesque Asia: Neuberger Berman’s unit Dyal Capital Partners bought a 20% stake in activist hedge fund firm Jana Partners worth $2bn, WSJ.com reports. The deal comes as activi

  5. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

 

banner