15/02/2012
By Ilonka Oudenampsen
Investors are increasingly focusing on generating income across most asset classes, according to a recent Aviva Investors survey conducted by its multi-manager team among 188 external fund managers in the UK, US, Europe, Asia and Latin America.
The study found that 83% of real estate managers believe clients are more focused on income today than they were previously, compared to 71% of equity, 67% of fixed income and 9% of hedge fund managers.
A majority of 64% of equity managers expect returns in excess of 5%, while only 3% expect negative returns. In contrast, 7% of fixed income managers expect returns of more than 5% from sovereign bonds in 2012, while 20% and 13% even expect negative returns from sovereign bonds and corporate bonds respectively.
Hedge fund managers are expecting returns between 5% and 15%, while the majority of real estate managers expects capital returns between 0% and 10%. A further 17% expect capital value falls and 14% expect capital growth of more than 10%.
Aviva Investors Global director of multi manager Nick Mansley said: “In an environment of low cash yields and continued uncertainty around economic growth it is not surprising that investors are more focused on income. We expect this to be a long lasting theme across several asset classes. Unsurprisingly, hedge fund clients are not particularly worried about income, but more real estate managers are seeing this shift than we expected.
“The fact that equity investors are seeing more of an increased focus on income and are more concerned about inflation than fixed income managers turns the world of investment on its head, and may reflect the broader uncertainty in markets at this point in time.”
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