Templeton survey finds European caution amid rising global investor expectations

The 2013 Franklin Templeton Global Investor Sentiment Survey has found that 60% of global investors believe their local stock market will appreciate through 2013, but that Europeans remain more cautious than investors elsewhere.

The Survey, which polled over 9,500 investors in 19 countries across the Asia Pacific, Americas and Europe, found that two thirds – 66% – expect the best equity and fixed income opportunities will be found outside their home markets this year.

In emerging markets, 66% of those polled expect their local stock market to appreciate this year, compared with 58% across developed markets.
Most optimistic were investors in Latin America, where 75% said they expect their local stock market to appreciate this year.

European investors expect 2013 to be better than 2012, but just 49% believe their local stock market will be up this year. European investors are more likely to feel that Asia will offer better opportunities than their own countries over the coming decade. But European investors overall are much more likely to adopt a conservative investment strategy than an aggressive one.

The mixed findings that European investors see opportunity abroad but are hesitant to take an aggressive approach to those opportunities stems from a number of factors, according to Jamie Hammond, managing director Europe at Franklin Templeton Investments.

“Their top concern about investing in other countries is lack of knowledge, followed by concern that other markets are riskier and the impact of exchange rates on investment returns. It appears that avoiding loss, rather than achieving higher returns, is still a top priority. As seen in recent years, this risk avoidance has led many investors to remain on the sidelines, missing opportunities.”

Wylie Tollette, director of Performance Analysis and Investment Risk for Franklin Templeton Investments added: “Many investors need to rethink risk and focus on the long term. Risk avoidance and risk management are two different things.

Trying to avoid short- term risk and volatility entirely may expose investors to other kinds of risks, such as inflation and the impact of rising interest rates. These longer-term risks can negatively impact their ability to meet their financial goals.”

To view the full results of the survey click here: www.franklinresources.com/global-survey


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