Asset managers follow fund buyers and put cards on EM

Added 7th November 2016

Fund management companies expect the world’s highest returns over the next 12 months to be found in emerging markets. They have severely downscaled their return prospects for European equities over the past couple of months, apparently in response to the attitudes of their clients.

Asset managers follow fund buyers and put cards on EM

The majority of asset managers now believe emerging market equities will return in excess of 5% over the next 12 months. The last time this was the case was in March 2013. While expectations about emerging market equities are on the ascent, those for European equities have started to cloud: since the Brexit vote, asset managers have continuously downgraded their return expectations, which are now at their lowest level since October 2014 (see chart below).

 

Asset managers hereby have finally followed in the footsteps of their clients, fund buyers. Since April, the latter have been stepping up their interest in global emerging market equities, and have become cooler towards European equities, according to Expert Investor investment sentiment data. This trend has been confirmed by Morningstar fund flows. 

 

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About Author

Tjibbe Hoekstra

Senior Reporter

Tjibbe joined Expert Investor as a senior reporter in March 2014. Before moving to London he worked as a financial news reporter for various news outlets in Amsterdam, including Reuters and ANP, the main news agency in the Netherlands. He also worked for Fondsnieuws, a website and magazine for finance professionals in the Netherlands. Tjibbe holds a MSc in Public Administration and a post-graduate diploma in Journalism.

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