Individual investors turning to equities, but not in India: Schroders
26 February 2014
Individual investors are turning to equities to boost returns in 2014, buoyed by optimism about global economic growth, to according Schroders Plc, Britain's biggest publicly-traded money manager.
About 70 per cent of the 15,749 respondents across 23 countries with at least 13,760 to invest said they were looking at stocks – though not in countries like India, but mainly in developed economies, the Schroders Global Investments Trends report showed.
About 18 per cent plan to invest in fixed income schemes, while 8 per cent expect to put their money in cash stocks.
As Wall Street saw record highs and world equity markets hit six-year peaks in 2013, seven out of 10 investors surveyed by British fund manager said they still planned to purchase stocks in the coming year, far more than the 18 per cent who were looking to bonds.
"The overall feedback was that (individuals) would invest more in 2014 on the basis on an improved economic landscape," said Carlo Trabattoni, head of European intermediary distribution at Schroeders.
''The report shows encouraging signs of renewed confidence in equity markets,'' Massimo Tosato, executive vice chairman of Schroders, said in an interview in London. ''It's an indication of where sentiment is, but it doesn't mean that a check will be written tomorrow.''
The European Commission on Tuesday forecast gross domestic product in the 18-nation euro region will rise by 1.2 per cent in 2014, an improvement from a 1.1 per cent forecast in November. The commission forecasts 2.9 per cent growth in the US and 7.4 per cent in China this year.
Tosato said the confidence of individual investors was broadly mirrored by the firm's institutional clients even as equity benchmarks including the Standard & Poor's 500 Index (SPX) trade near record highs. He expects mutual funds to benefit most as investors continue to put cash back to work.
About 27 per cent of respondents said Western Europe offers ''strong growth opportunities'' this year, up from 10 per cent last year. Another 31 per cent are betting on the US, while 39 per cent favor the Asia-Pacific region, down from 46 per cent a year ago.
Almost half of investors said they planned to invest some of their disposable income in 2014, while 23 per cent said they still plan to deposit money into a savings account. Nine per cent said they will either pay down debt or make luxury purchases.
Schroders oversees about $428.6 billion in assets.