Alpha Research: Investors in search for alternatives

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With an abundance of money supply and record low interest rates, investors search for yield is increasingly turning to alternative asset classes such as real estate and cash, according to the latest Asset Allocation Consensus survey conducted by Dutch Alpha Research.

The June data, which is based on reports of 58 global asset managers, reveals that while equities remain the favourite asset class, the percentage of overweight declined by 5.3% to 75.5%. This marks a more than 10% decline for equities compared to the previous year.

At the same time, not a single asset manager is overweight on bonds, the neutral percentage rose by 3.9 percentage points to 39.2% while 60.8% of respondents are underweight on bonds.

Consequently, while investors continue to be cautious on alternative asset classes, the latter have become relatively more attractive. Real estate made significant headway compared to the previous year, with just under 40% on overweight and almost 60% of respondents on neutral, it is the second most popular asset class.

Investors are more cautious on commodities, with more than 50% neutral and just over 50% underweight, respondents expect little from this asset class.

In terms of geographic allocation, Europe is seeing a revival, with almost 80% of respondents now being overweight on European equities, followed by Japan with more than 60% and compared to just over 40% overweight for US equities. Meanwhile, more than a quarter of respondents are now underweight on US equities.

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