BusinessTimes
GLOBAL fund managers are optimistic that markets in most regions will begin to recover this year, according to a survey by consulting firm Watson Wyatt.
The fund managers, who collectively have assets under management of over US$10 trillion (US$1 = RM3.57), indicate that the period of recovery in most markets will be protracted.
They believe that the influence of hedge funds and investment banks will decline significantly while that of pension and sovereign funds will rise.
The respondents also expect to see their institutional clients opting for more conservative investment strategies as well as prioritising greater risk control.
"The views expressed by this influential group give us some valuable insights and should inform how, why and when key investment decisions are made," Carl Hess, Watson Wyatt global head of investment consulting, said in a press statement released in Washington.
According to the survey, which was conducted at the end of 2008, managers have overall bullish views of returns on public equities, investment grade bonds, high yield bonds and emerging markets over the next five years.
However, they hold fairly bearish views of returns on hedge funds, government bonds, money market and real estate during the same period. They remain generally neutral on private equities and currencies.
On equities, respondents expect stock markets to revert to historical return levels by 2012, while projections about returns in 2009 vary significantly by region.
According to the median view of respondents, the anticipated returns on global equities in 2009 is 6.7 per cent, with the US, the UK, eurozone, Australian, Japanese and other Asian equity markets are expected to deliver 8.8 per cent, five per cent, 5.5 per cent, eight per cent, 5 per cent and 10 per cent, respectively.
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