According to the latest Risk Rotation survey released by ING Investment Management (ING IM), 64% of institutional investors expect the ECB to introduce quantitative easing (QE) measures this year, almost one third (27%) sees first measures to take place in the third quarter of 2015.
The research, which is based on a survey among 152 institutional investors, also revealed that half of all respondents consider a deflationary Japan-style scenario in the eurozone to be ‘moderately likely’, while 13% see it as very likely. Only 23% of investors believe that the eurozone will not enter deflation.
Valentijn van Nieuwenhuijzen, head of Strategy Multi-Asset at ING IM says: It is clear that there are very real concerns of a prolonged period of deflation which could – if investors are correct – twist Draghi’s arm when it comes to implementing a Sovereign QE programme in early 2015.
Other than a potential Eurozone crisis, investors cited interest rate rises (50%), Chinese hard landing (47%) and a fiscal shock (37%) as the most significant risks posed to investment portfolios,
With regard to asset allocation, 40% of institutional investors surveyed say they have maintained their positions in terms of risk over the past six months. European investors appear to be the most bullish when it comes to risk, with 32% having increased their appetite in recent months, compared to 29% for all investors.