Global investor confidence returning in 2013 – Schroders report

More than 80% of investors around the world plan to increase or invest the same amount over the next 12 months, according to the latest Schroders Global Investment Trends Report.

Surveying over 14,800 active investors across 20 countries in four continents, the Report found that 38% of investors plan to increase the amount they invest over the period.

Asian investors will increase their investments by 5.5% on average, against just 1% by European investors – the least confident region.

However, confidence is returning across the board, with almost half, 48% of investors surveyed expressing more confidence about investment opportunities this year than last year. Asian and US investors were most confident.

The least optimistic countries were Italy and Portugal, with more than a third – 38% and 37% respectively – feeling less confident.

The Report also found differences between where investors thought the best opportunities lay and where they would actually invest their money.

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Home bias was evident, the Report said, with, for example, 80% of US investors claiming to see the best growth potential for investments in their home country. On average, 55% of Asian investors believe their own country will offer the best growth potential over the next 12 months. Investors in Europe and the Middle-East (40%) showed the least confidence in their own country as the focus for growth. Within Europe, Switzerland has the highest home-bias (61%), followed by Germany (59%).

Generally, the Asia Pacific region emerged as the preferred investment destination. Some 52% of Asian investors favour investing in Asia Pacific countries, with 45% of European and Middle-Eastern investors seeing Asia Pacific as an engine for growth. Some 37% of US investors saw the Asia Pacific offering significant growth potential in 2013, despite the proven home bias.

Europe remains the least favoured region, despite a stock market rally of about 20% through 2012. Just 9% of US investors viewed Western Europe as offering good investment prospects, and just 7% of Asian investors.

Massimo Tosato, executive vice chairman at Schroders, said: “It is clear that investor sentiment globally is changing. These findings paint a picture of growing investor confidence. As we move through the second-quarter of 2013 there’s a growing consensus that the global recovery is gathering pace, but at different rates around the world. Investors are planning to return to the stock market in greater numbers this year and see growth opportunities, particularly in equities and notably in Asia.”

Risk is another key area surveyed for the Report.

Globally, investors said they are looking to split investments into 46% low-risk assets, 34% to medium-risk assets and 20% to high-risk assets.

The Report also highlights how wider economic conditions have taken their toll on the overall investments and disposable wealth of respondents since the recession in 2008. Only 35% of investors globally stated that their investments had increased since then, compared to 48% who said they had decreased.

The biggest concern for investors remains the eurozone debt crisis. About half, 49%, of those surveyed identified it as something which worries them. Other concerns include political instability and uncertainty of policy direction, as well as fears of persistent weakness in global recovery.

Tosato said: “In the face of this nervousness more than one-in-four global investors (29%) are still looking to increase exposure to cash-based savings this year. This is surprising given low or close to zero interest rates in many countries and rising stock-market performance. Finding the right investment opportunity is crucial. Savers are seeking information and analysis on asset performance from multiple sources and the role of intermediaries is becoming increasingly important.”

One-in-three will rely on advice from intermediaries (34%), with 21% going to a financial adviser. Approximately a fifth (18%) view financial websites and one-in-ten (9%) gain information and analysis via the media.

The Report found that the average active investor will invest or re-invest the equivalent of €61,500 over the next 12 months, although over half (53%) are looking to invest between €10,000 and €40,000. Around a fifth (21%) of global investors will invest €100,000 or more over this period.

Investors in the USA are planning to invest the most ($132,487, the equivalent of €100,690), compared to the equivalent of €35,813 by Indonesian investors, who are investing the least.

Further details of the report are available at: www.schroders.com/sgitr2013

 

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