Investor sentiment is turning more positive, says Schroders

Investor sentiment is changing, reflecting a greater appetite for risk and a more positive outlook for the markets and for the Eurozone, according to a survey of Schroder’s intermediary clients.

More than a third of intermediaries (36%) believe equities will be the most important asset class over the next six months, the survey found. Just under a third (29%) believe multi-asset to be the most important asset class, while 26% of the intermediaries picked bonds.

Despite these findings, nearly half (46%) believe that bonds are the best asset class for providing income, a popular strategy for ensuring sustainable returns, against the uncertain outlook, the survey found.

Peter Beckett, head of international marketing, Schroders, said: “Despite slow political and economic progress across Europe, this survey has highlighted a difference in opinion, which could indicate changing sentiment towards markets and risk appetite. 

“Investors are demanding income bond products that offer stable and consistent returns and yet they believe that equities, which are more volatile but with higher return potential, will be the most important asset class later this year.”

Supporting the desire for income, is the finding that 38% of the intermediaries use convertibles at times of uncertainty due to their income potential and lower sensitivity to market volatility.

Beckett said: “The use of convertibles could indicate that investors, while still concerned by market volatility, are more confident about the Eurozone outlook and global growth prospects this year.” 

Regardless of the Eurozone debt crisis and the consequent default risk faced by a number of countries, the survey reveals a positive outlook for the region with 61% believing that the number of countries in the Eurozone will be the same at the end of the year.

The findings are based on replies from 104 intermediaries from Europe, the Middle East and Latin America who were attending a recent Schroders Investment Conference in London. They were asked their outlook for several asset classes and investment strategies, as well as their views on the Eurozone.

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