NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

European investors stick with stock risk in Jan -Reuters poll

Published 01/28/2010, 07:39 AM
Updated 01/28/2010, 07:45 AM

By Jeremy Gaunt, European Investment Correspondent

LONDON, Jan 28 (Reuters) - Continental European investors remained wedded to equities and other riskier assets in January despite growing fears about the potential for economic recovery to stall, a Reuters poll showed on Thursday.

The poll of 12 European-based asset management firms showed a typical mixed portfolio to hold 51.2 percent of its assets in equities to 36.8 percent for bonds and 5.3 percent cash.

Direct comparison with previous months was not possible because of changes in the sample and a different set of questions from previous polls.

But the survey showed strong appetite remained for equities, alternatives such as hedge funds, and corporate bonds.

The latter were most often picked by respondents when asked to name their most overweight bond sector. Safe-haven U.S. Treasuries and Japanese government bonds were the most underweight sector.

Johannes Maier, head of asset allocation, fund of funds, at Germany's Postbank, said that although he is cautious in the short term, trends for investors remain positive.

He said the current pull back by investors could even be a buying opportunity.

"We should be a little bit cautious in the first half of the year. (For) the second half of the year, I would be quite optimistic," he said.

Financial markets are currently consolidating after last year's risk rally. The FTSEurofirst 300, for example, is down more than 2 percent this year and heading for its first largest monthly loss since the risk rally began last March.

Respondents cited a number of risks facing markets, particularly the expected withdrawal of liquidity from central banks as the global economy improves.

Despite this, European investors were staying overweight in equities. On a scale of +3 to -3, where 0 is neutral, the respondents were +1 on equities and alternative assets, neutral on cash and property and -1 on bonds.

Although not directly comparable, this was more or less unchanged from December. Only one of the 11 respondents who answered the overweight/underweight question was overweight bonds.

There were some signs of caution, however. Asked to name their most popular stock sector, the most common response was health care while the most popular underweights were consumer discretion and financials.

This paints a picture of relative risk aversion within stock holdings. (Editing by Andy Bruce)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.