Submitted by Tim Hewson on 8/07/2010 14:00 | category: Managed Funds
Just when things seemed to be on the path to recovery, Europe’s sovereign debt problems have dragged the global economy back into panic mode with the markets again returning to a state of perpetual flux.
So for those who are curious to know what the investment professionals are really thinking, the ‘Investment Manager Outlook’ survey conducted by specialist multi-manager Russell Investments provides a quarterly window into the soul of money managers.
Surveying forty of Australia’s leading fund managers, the survey, released in June, clearly indicated that fund managers continue to see opportunities across most asset classes over the next twelve months, despite the threat of increased volatility.
In local news...
Of those fund managers surveyed, 61% were bullish on Australian equities despite an underperforming market and 48% believe they are now seeing value in the market at current levels.
Taking a closer look at the underlying sectors, 72% of managers were bullish on Industrials, 64% on Materials and 49% on Information Technology.
On the flipside, 53% were bearish on Consumer Staples, 47% on Telecommunications and 39% on Consumer Discretionary.
The most notable mover of the quarter was the view on Financials. After hitting its peak level of support over the past five years in the previous March quarter, bullish managers fell dramatically from 64% to just 36%. Bearish managers almost tripled over the same period to 33%.
Most popular was Australian Small Caps with 65% of fund managers remaining bullish and only 24% bearish.
Go global...?
Despite worsening economic conditions in Europe and the US, 46% of managers remained bullish on international equities in June, up from 39% in the previous survey. Whilst managers with a bearish tone dropped 25% from 39% to 29% over the quarter.
A-REITS Rebound
Despite A-REITS underperforming due to the Reserve Bank of Australia’s rapid increase in interest rates, they had gained in support over the quarter. Bearish managers had remained unchanged at 37%, but bullish managers had doubled from 17% in March to 34% in June.
Lucky last
Least popular was again Australian Bonds, with only 11% of managers bullish on the asset class. On a more positive note, this was an 80% increase from the previous survey and bearish managers had shifted from a massive 74% to 46%.
The little battler
For those of you curious about the Aussie Dollar, it was evenly split with 21% of managers bullish and 21% bearish. On these numbers alone, it’s hard to tell if the remaining 58% of managers were neutral, or just as confused as the rest of us.
Of course the good news from the survey for long term investors is that despite some short term pain and market volatility, the majority of fund managers see opportunities across most asset classes in the next twelve months.
So enjoy the bumpy ride!
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