By Ilonka Oudenampsen
Equities offer the most compelling investment returns over the next year, according to 35 per cent of European investment professionals responding to an MHP Communications survey, down from 47 per cent last year, as growing numbers favour fixed income.
For their fourth annual survey, MHP questioned 83 senior figures at European pension funds, consultancies and investment management companies, including CEOs, managing directors, partners, CIOs and heads of communication.
Only 30 per cent of respondents saw multi-asset managers as the most successful type of asset management company, down from 49 per cent last year, while there were smaller upturns in those favouring boutique, fiduciary, alternatives and traditional long-only managers.
Equities were cited by 22 per cent of respondents as the most compelling emerging markets asset class, down from 33 per cent last year, while emerging market multi-asset strategies rose in popularity from 30 per cent in 2011 to 39 per cent this year.
Three quarters felt pension funds should be re-risking rather than continuing to de-risk, while four out of five believed opt-out rates among automatically enrolled pension savers will be below 25 per cent and nearly half expect opt-out rates to be below 10 per cent.
Policy makers and governments are most to blame for the eurozone crisis, said 49 per cent of respondents, while 19 per cent blamed the banking sector and 2 per cent investors. The eurozone crisis is also the main concern of the industry, with many fearing that the euro crisis ‘is probably going to explode at some point, with devastating consequences’.
MHP Communications managing director Sally Todd said: “This year’s survey reveals a picture of growing uncertainty and diversity. Equities remain the most attractive asset class, but by a smaller margin than last year, as fixed income, property and others grow in popularity. Multi-strategy managers are still seen as being the most successful, but by fewer respondents than last year, with smaller up-ticks for specialist managers.
“The findings will also make uncomfortable reading for policy makers, particularly in Europe, with many of our respondents citing continuing uncertainty in the Eurozone area as keeping them awake at night, and half of them laying the blame with policy makers and politicians.
“The only area which reveals a striking uniformity of view is on what investors are looking for in engagement with boards, where three quarters have their aim firmly on the goal of creating shareholder value. The extent to which they will achieve this in the coming year remains to be seen.”
Other findings showed that 37 per cent of respondents saw fund structure/asset allocation as the most important single attribute for DC default funds, followed by member knowledge and understanding, and contribution levels, at 22 per cent and 18 per cent respectively. Member participation and manager expertise was cited by 8 per cent and 6 per cent respectively.