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Fund managers expecting 2012 volatility, finds AIC poll

An “overwhelming” majority of fund mangers expect increased volatility to persist into 2012, according to research by the Association of Investment Companies .

The trade body’s annual fund manager poll shows 96 per cent of respondents anticipate continued volatility in the coming 12 months. However, 71 per cent of fund managers still expect the markets to end 2012 up.

Most confidence is given to emerging markets, with 27 per cent of managers saying they expect these regions to close ahead next year. This is followed by the US, Europe, Asia Pacific ex Japan, Latin America and frontier markets.

Offering reasons for this optimism, 26 per cent cite strong company balance sheets and the same proportion claim equities remain good value. Additionally, 13 per cent think global growth will be better than expected, while 9 per cent place their faith in government interventions in the economy.

However, the eurozone debt crisis is expected to remain the main threat to markets in the coming year, with 62 per cent of managers labelling it the biggest single risk to equities. One-third regard a global recession as the largest threat.

Annabel Brodie-Smith, communications director at the AIC, says: “It’s been a tough year for markets with eurozone debt dominating the year. Fund managers are not surprisingly cautious about next year’s prospects.”

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Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).

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Comments

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  1. Talk about manipulation of statistics! 71% of fund managers expect markets to end 2012 up yet Emerging Markets tops the poll with 27% backing……

    You can’t just add up the percentages of managers who think specific markets will rise, combine them, then give a total percentage who think markets in general will rise! You should work for the FSA……

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