IEPlus: Italy’s managers say it’s time to think positive

Asset managers in Italy are thinking positive. According to findings of a Morningstar survey on 17 asset managers operating in the country, which included heavyweights Eurizon Capital Sgr, Fideuram Investimenti and Pioneer IM, fund managers have taken a more positive outlook on the future of the eurozone.

While at the beginning of the year about 53% of Italy’s fund managers were expecting a deterioration in outlook for the eurozone, as of September less than 30% remained gloomy about the future of the euro-area.

Easing policies adopted by the European Central Bank and the Federal Reserve have increased risk appetite among Italian portfolio managers.

Two thirds of surveyed managers are expecting a poisitive performance of European stock exchanges.

Flows to more risky assets is set to increase yields on German bunds, and over the next months Italian managers expect a decrease in political risk which will increase prices of peripheral governement bonds.

About 65% of managers expected the price of the bunds to decrease over the next months.

While doubts on the future of the single currency are partially fading away, Italian managers remain cautious on the US outlook.

Surveyes managers mentioned three main risks affecting US investments: Presidential elections coming up in November, the fiscal cliff and the more general macroeconomic outlook for the economy. The combination of this three factors is likely to lead to higher volatility on the US stock exchange.

Finally, China remains under the spotlight of Italian managers. Premier Wen Jiabao stated a 7.5% growth target for 2012. Managers questioned the number, but 41% expects a positive performance of the local stock market.

Following the risk-on attitude triggered by a more positive outlook for the eurozone, managers also expect greater investments to flow towards Asian emerging markets.

In this scenario, US Treasuries, which were favoured over the last months by investors’ flight to quality, have now become less attractive.



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