26 February 2014
Investors around the globe are looking to equity markets for growth this year, according to a comprehensive new report of investor sentiment by Schroders. Analysis of the Schroders Global Investment Trends Report 20141, a survey of 15,749 investors across 23 countries, reveals that more than four fifths (82%) are looking to maintain or increase the amount they invest and save in 2014, with 70% of investors2 surveyed looking to invest in equities.
This increased appetite for equities appears to reflect a more positive long-term economic outlook, despite recent market volatility. The report reveals that around the world investors are looking to invest in developed economies, as these are seen as offering more stable potential returns and the best growth opportunities.
As for other major asset classes, the report reveals that just 18% of investors will be looking to fixed income and only 8% plan to retain money in cash.
When thinking of their financial priorities for 2014, almost half (48%) of those polled are planning to invest disposable income. A smaller proportion (23%) intend to deposit money in a savings account, while only 9% said they would either focus on paying off debt or spend disposable income on luxury purchases.
Indeed, investor confidence in developed economies such as the US and Western Europe has spiked markedly since the 2013 report, with 27% of investors looking to Western Europe (up from 10% in 2013) and 31% expecting the US to offer strong growth opportunities (compared to just 18% in 2013).
However, Asia Pacific retains its crown as the region that global investors expect to drive the strongest overall growth in 2014, with 39% of investors favouring the region. This is a marked decrease from last year, when 46% of investors saw the region as the likely top investment hotspot.
Massimo Tosato, Executive Vice Chairman, Schroders plc said: "This report shows encouraging signs of renewed confidence in equity markets, driven in part by improving economic and market performance in developed economies. In 2013, the US economy delivered Q4 growth of around 3% despite the Federal Government shut-down in October. In Europe, Germany and the UK have performed well. Equally, Japan has delivered some of the best results of any global economy following Abenomics policies, giving renewed hope to investors across the globe.
"However, this trend towards equity investments is not without challenges in 2014. Despite positive news from some countries, global GDP growth remains lower than expected, when compared to recovery rates from previous recessions. This growth will not be uniform across sectors, economies or regions, particularly given that significant weakness remains in some Eurozone countries, and also in emerging markets where the withdrawal of QE is weighing heavily on stock markets. We are in a still transitioning global economy and taking an active investment approach remains key for investors."
The majority of investors are looking to invest more widely in equities outside their national markets or other asset classes, while a smaller proportion (41%) of respondents are planning to buy equities in their own country this year. Investors polled in 2013 were more domestically focused, with half of respondents looking to invest in their own country as the driver for growth.
Massimo Tosato concludes, "This year investors are taking a more global view as they seek to capitalise on new growth opportunities. However, the shift away from domestic assets to ones outside of investors' home markets means that many will be pushing the boundaries of their knowledge. Seeking professional financial advice should be a focus for investors as they look to move into new areas and benefit from global growth and opportunities."
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Notes to Editors
For media only.To view the latest press releases from Schroders visit: http://ir.schroders.com/media
Schroders commissioned Research Plus Ltd to conduct an independent survey of 15,749 investors in 23 countries around the world who intend to invest €10,000 (or the equivalent) or more during the next 12 months. The survey was conducted online between 2nd - 24th January 2014 and these individuals represent the views of investors in each country involved in the survey.
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. The opinions stated in this presentation include some forecasted views. We believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee that any forecasts or opinions will be realized.
Schroders is a global asset management company with £256.7 billion (EUR307.2billion/$415.8billion) under management as at 30 September 2013. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business. Further information about Schroders can be found at www.schroders.com.
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1 Schroders commissioned Research Plus Ltd to conduct an independent survey of 15,749 investors in 23 countries around the world who intend to invest €10,000 (or the equivalent) or more during the next 12 months. The survey was conducted online between 2nd - 24th January 2014 and these individuals represent the views of investors in each country involved in the survey.
2 For the purpose of this research project, we have defined an 'investor' as someone who is looking to invest at least €10,000 or equivalent in the next 12 months.