The study, in which Fidelity Worldwide Investment interviewed 467 UK-based money managers between 25 November and 15 December 2014, showed that 71% of those questioned were most positive about the equity market.
Optimism surrounding financial markets across the board also remains high, as 78% said they are holding a positive outlook for 2015 alongside 42% favouring the overall developed market spectrum.
Despite volatility and a FTSE All Share 2014 return of 1.18%, 40% of investors recommended buying UK equities against 11% who advise a sell-off.
The income sector is also poised to do well, with 90% of those canvassed saying they will be advocating their clients either topping up or maintaining their holdings in the market.
Passive funds are also set to see a small influx of investment, as 27.3% voiced their intention to recommend vehicles. Predominant reasons given for endorsing passive funds were efficient replication of index performance, cited by 37%, along with 30% liking the fee structures.
However, 19.5% said they are less likely to recommend passive funds, with the remainder not looking to make any change at all.
Figures from the Investment Association also showed that tracker funds underwent a net sales increase of £92.9bn in November alone, translating into a market share rise from 9.7% to 11% compared to 12 months earlier.
At the other end of the spectrum, the support for bond exposure was particularly underwhelming, as 50% of investors advised that their clients should actively reduce their sovereign bond exposure.
Rising interest rates and political risk are high on the list of investor concerns, with 50% of those surveyed worried that interest rate normalisation and the impending UK general election will affect their portfolios over the next 12 months. Other threats weighing on investor minds are slow global growth, market volatility, the falling oil price and Russia.
“For the last couple of years our survey has revealed that advisers and wealth managers continue to favour equities over fixed income for their clients’ portfolios,” said John Clougherty, Fidelity’s head of retail.
“While many predict a rotation out of bonds, the asset class has produced reasonably strong returns, with UK gilts and UK corporate bonds returning nearly 14% and 10.63% respectively in 2014. However, the prospect of rate hikes during the year could certainly impact bond returns, thus making strategic bond selection a crucial tool in allocation decisions.”
