Investors Eye Equities to Boost Returns, Schroders SaySarah Jones
Individual investors are turning to equities to boost returns in 2014, buoyed by optimism about global economic growth, according to Schroders Plc, the U.K.’s biggest publicly traded money manager.
About 70 percent of the 15,749 respondents across 23 countries with at least 10,000 euros ($13,760) to invest said they were looking at stocks mainly in developed economies, the Schroders Global Investments Trends report showed. About 18 percent plan to invest in fixed income, while 8 percent expect to leave their money in cash.
“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 yesterday forecast gross domestic product in the 18-nation euro region will rise by 1.2 percent in 2014, an improvement from a 1.1 percent forecast in November. The commission is forcasting 2.9 percent growth in the U.S. this year and 7.4 percent in China.
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 trade near record highs. He expects mutual funds to benefit most as investors continue to put cash back to work.
Forty-three percent expect to add to their investments in 2014, with the average investor increasing the amount by 5 percent, the survey, done Jan. 2 to Jan. 24, showed.
About 27 percent said western Europe offers “strong growth opportunities” this year, up from 10 percent last year. About 31 percent are betting on the U.S., while 39 percent favor the Asia-Pacific region, down from 46 percent a year ago.
Almost half of investors said they planned to invest some of their disposable income in 2014, while 23 percent said they still plan to deposit money into a savings account. Nine percent said they will either pay down debt or make luxury purchases.
Schroders oversees about $428.6 billion in assets.