German investors choose stocks despite volatility concerns
German investors show a disproportionally strong interest in defensive stocks and international diversification compared to their European counterparts, the latest AllianzGI Global RiskMonitor survey revealed.
The poll, conducted among 735 institutional investors globally, including 60 Germans, revealed that 85% of respondents consider stock market volatitlity to be the key risk factor over the next twelve months. Currency and commodity market risks are also seen as threats, with 75% and 64% respectively raising concerns.
Despite mounting fears of stock market volatility, 62% of German investors remain overweight on stocks, which is relatively higher than their counterparts globally, on average, only 30% of global investors said to be overweight on European stocks. Within the EMEA region, 49% of respondents are overweight on stocks. The highest levels of overweight can be found in Swizerland, where 72% of respondents consider increasing their exposure.
The survey also revealed that for German investors, geographic diversification remains the weapon of choice when tackling stock market volatility, with 73% of respondents stating that they aim to diversify across countries.
The results allow two conclusions, says Tobias Pross (pictured), head of EMEA at Allianz GI: “Firstly, as a result of the persistent low-interest environment, institutional investors are increasingly prepared to take risks and have increased their equity exposure. Secondly, they discovered the charme of defensive stocks which are characterised by steady cash flows independent of the economic climate as well as stable dividend payments.In that sense, their investment behaviour is perfectly necessary and reasonable.”