Schroders poll highlights investor concern at rising inflation

A poll of some 125 intermediary clients by Schroders has indicated that 76% of respondents believe that central bank activity could lead to inflation rising to over 4% a year within the next five years.

The clients, from across Europe, the Middle East and Latin America, were polled at a Schroder investment conference in London. They were surveyed on their outlook for several asset classes, as well as their views on central bank activity.

Three quarters (75%) believed that central bank activity will lead banks to start lending again and boost growth globally, but only 13% were confident that their portfolios are sufficiently safeguarded against the possible risk of inflation.

In this potentially inflationary environment, there was a clear consensus (89%) that global equities are expected to deliver higher levels of returns between now and the end of 2013, with 68% of those surveyed saying they are currently overweight in this area.

Within global equities, there is a clear interest in European equities, with 58% of those surveyed stating that they expected this to be the best performing asset class in 2013. This reaffirms results from the survey conducted in October last year, where 41% intended to increase their clients’ asset allocation to European equities by the end of the year.

Peter Beckett, head of International Marketing at Schroders, said the survey highlighted a clear change in investor attitudes towards global and European equities, as predicted by the results from the poll at the end of last year.

“The increasing sense of stability within the eurozone, along with a firm belief that central bank activity will take hold and encourage banks to start lending again, has led to increased confidence in equity markets at the start of 2013,” he said.

“However, there is noticeable concern among investors that inflation could increase meaningfully over the short to medium-term period and we would expect to see increasing client demand for assets, such as equities, which are able to perform well in this environment.”

 

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