Investment advisers stick with equities despite global turmoil

Funds investing in continental Europe are predicted to give better returns than any other geographical sector, according to the results from the Financial Express Adviser Fund Index (AFI) mid-season survey.

Conversely, advisers on the AFI panel, which comprises 40 investment IFAs representing more than 40 billion of investor assets under management, are divided on which asset class is likely to see the lowest returns, with 53.3 per cent predicting bonds to perform worst, compared to 26.7 per cent for cash and 20 per cent for commercial property.

Large cap shares are most popular, with 93.8 per cent of investment IFAs saying they expect them to perform best over the next 12 months.

When asked whether they expected growth or value equity management styles to perform best over the same period, a majority of 68.8 per cent picked growth.

Europe excluding UK is considered the best geographical prospect for the coming year, backed by 43.8 per cent of panellists, with Asia Pacific excluding Japan second most popular, with 25 per cent. Confidence in global emerging markets is low, with 56.3 per cent expecting it to be the worst-performing geographical sector, showing reluctance for higher risk. North America is also proving unpopular, with 31.3 per cent of panellists saying it will perform worst.

Advisers were scathing about multi-manager funds, with only 31 per cent saying funds of funds were important, with 69 per cent seeing them of no importance. Managers of managers were considered of no importance by 87 per cent of IFAs.

Paul Wynne, head of marketing and communication at Financial Express, says: “The results of the latest survey indicate a range of investment strategies are in play, and as we saw from the rebalancing in May, fund portfolio churn rates continue to rise.

“It will be interesting to see what impact recent market volatility will have on the portfolio adjustments for the November rebalancing.”

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