The annual poll from the Association of Investment Companies has found that 87 per cent of fund managers expect markets to rise next year, as opposed to only 71 per cent in last year’s poll.
The survey also revealed that some 86 per cent those polled expect equities to be the best performing asset class next year, while blue chips, which were popular last year, appear to have fallen out of favour, with only 4 per cent of managers preferring them, down from 20 per cent in 2011.
This is the lowest figure in the poll’s 10-year history, as the percentage has never been in single digits before but managers now appear to be favouring financials for next year, with some 22 per cent going for them, 17 per cent preferring technology and 13 per cent going for resources.
Europe and Emerging Markets are the top two regions tipped to outperform in 2013, despite the Eurozone’s slide back into recession, with a quarter of managers favouring the region, up from 11 per cent last year and the same number opting for Emerging Markets. The US came in third at 21 per cent.
The improvement in the economy in the States has cheered 9 per cent of managers, but a few are concerned about the US “fiscal cliff”. In fact, global recession is one of the single biggest threats to equities according to a third of managers, while for 25 per cent, the Eurozone debt crisis is the biggest threat. However, this figure has dropped dramatically from last year’s 62 per cent.
However, despite the more optimistic outlook, over half of the managers polled said that they plan to make no changes to their gearing next year, while almost a quarter said they would wait and see, leaving only 22 per cent prepared to increase their borrowing.
If you would like to discuss an investment further, come and speak to myself or a member of the Milsted Langdon team. We’re always on hand to offer impartial, honest and friendly advice, to help you achieve your financial goals.
Steve Horton is a Chartered Accountant and a Chartered Financial Planner who specialises in helping clients to manage their pensions and investments