Schroders’ Global Investment Trends Report, which surveyed 14,800 investors in 20 countries, found more than four fifths (81%) of investors are planning to increase or invest the same amount over the next 12 months as over the previous 12, reflecting, according to Schroders, the recent rally in global stock markets.
Massimo Tosato, executive vice chairman, Schroders said: “It is clear that investor sentiment globally is changing. These findings paint a picture of growing investor confidence. As we move through the second-quarter of 2013 there’s a growing consensus that the global recovery is gathering pace, but at different rates around the world.”
According to the report, almost half (48%) of investors are more confident about investment opportunities in 2013 than they were last year, more than double the proportion (18%) of investors who feel less confident.
Home bias
However, there is a significant divergence in the confidence of investors between regions, with 59% of those in the US and Asia saying they were confident, compared with only 39% of investors in Europe and the Middle East.
This is perhaps partly explained by European investors’ concerns about their own economies. When deciding where to invest, Schroders said investors often display a “home bias” – this is demonstrated by investors in both the US and Asia where 80% and 55%, respectively, said they saw the best opportunities at home.
Compare this with investors in Europe and the Middle East where 60% said the better opportunities lie outside their region. Although this may not be surprising, given the news today that France has officially entered its second recession in four years and that recession has continued in the eurozone bloc of 17 countries for the sixth quarter.
The Asia-Pacific region meanwhile, is, perhaps not surprisingly, picked by most investors (other than the ‘home-biased’ Americans) as the top investment destination, with 45% of European and Middle Eastern investors picking it as the “engine for growth”. Even one in three investors in the US said they saw Asia Pacific as “offering significant potential in 2013”.
In contrast, and despite stock market growth of nearly 20% in 2012, Europe continues to be regarded less favourably by investors. Just 12% of investors in Europe and the Middle East and 9% in the US viewed Western European countries has offering good investment prospects. Only 7% of Asian investors viewed Western Europe investments as attractive.
In similar research released today by Baring Asset Management which sought the views of intermediaries, the eurozone was also a point of concern.
According to Barings, 71% of UK based intermediaries said eurozone growth continues to be the biggest macro-economic challenge to investment growth over the next six months.
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