More than half of institutional investors (56%) have increased their appetite for risk over the past quarter, according to ING Investment Management.
The asset manager’s latest Risk Rotation Survey of 79 institutional investors around the globe found the appetite for equities had risen in Q4 2013 with 73% viewing it as their favourite asset class; an increase from 64% in Q3.
Real estate came in second at 45%, up from 34% over the same period.
Meanwhile, only 11% of investors said their risk appetite had decreased in Q4 – a fall from 18% three months earlier.
ING Investment Management head of strategy multi-asset Valentijn van Nieuwenhuijzen said: “An increase in risk appetite among investors is definitely a promising sign as we head into 2014. With more than half of respondents stating that their appetite had increased over the past six months, it indicates that investors are feeling more positive about the global economy.”
Elsewhere, one in five (19%) of respondents cited the removal of quantitative easing and interest rate rises as ‘very significant’ threats to investment portfolios. Meanwhile, the eurozone crisis also remains high on the agenda of institutional investors with 37% citing it as a concern, although this compared favourably to the previous quarter when 54% stated the same.
Institutional investors are also showing growing confidence in Japan with 60% of respondents stating that Abenomics would be effective in reviving the world’s third-largest economy, compared to 37% in the previous quarter. Only 5% of respondents in the latest survey believed that it would be either ineffective or damaging versus 16% in Q3 of last year.
Van Nieuwenhuijzen added: “What we are seeing is the most synchronised global recovery since 2009. More noteworthy than the level of optimism is the degree of consensus that simultaneously seems to have emerged amongst market participants; with stronger growth and less shock risk on the horizon, most agree that equities are the most attractive asset class, with Europe and Japan coming out as the preferred regions in 2014.”
Comments