Equity strategies remain the most popular with investors, with more than a third (37%) of them in Q3 this year favouring the asset class over the next six to 12 months in terms of risk/return1, according to NN Investment Partners (NN IP).
Other strategies seen as highly favourable included total return multi asset and illiquid assets such as private equity and infrastructure (both 31%); balanced multi asset (24%) and fixed income spread products (23%). The most attractive geographical location for equity investing is Emerging Markets, with 29% citing it as the most attractive, followed by the US (25%).
The most favourable sectors remain healthcare, consumer staples, technology and utilities. However, energy (up 9%) and industrials (up 5%) are both growing in popularity, at the expense of technology (down 8%) and telecoms (down 7%).
Patrick Moonen, Senior Strategist, Multi Asset, NN Investment Partners, commented: “Most investors who are currently navigating global markets have experienced an easy ride recently. Calmness persists for now and despite a lot of economic and political crosscurrents in the headlines, only very modest ripples appears on the surface of markets. Ample liquidity continues to slush around and is once more providing wide-ranging support of asset classes of all sorts. This is reflected in upward trending asset prices as well as declining volatility in markets.
“At present, we are overweight equities in our portfolios. The earnings season went well, the Brexit impact is not felt yet and monetary policy remains supportive. We have shifted our regional allocation further away from the US towards the UK and Japan. This shift is based on the relative mix between valuations, policy and positioning. The resulting allocation has a bigger cyclical tilt, is positively correlated with rising bond yields and tighter US monetary policy and has a bigger value bias.”
1. Findings revealed in NN Investment Partners’ own research carried out in a survey by Citigate Dewe Rogerson amongst 86 international institutional investors in July and August 2016