UK advisers are showing surprising bullishness despite facing a regulatory onslaught and a shaky economy, the latest Financial Times Celsius report reveals.
The quarterly tracker, which predicts fund flows over the forthcoming three month periods, shows adviser confidence has risen since the final quarter of 2010, with 45 out of 61 investment categories covered by Celsius experiencing a positive boost in sentiment.
Four out of six asset classes had a positive increase in sentiment, as did 10 of 13 investment regions, 11 of 12 investment products and 20 of 30 investment sectors.
The Celsius review of Quarter 1 2011 reveals Open Ended Investment Companies (Oeics) still outstrip all other product types as the preferred home for the deluge of investor flows that were allocated in 2010.
Investment trusts achieved the most positive sentiment shift since last quarter, which should be the start of an upward yet sustainable trajectory for the product structure as advisers near Retail Distribution Reform (RDR) implementation.
The latest Celsius results highlight the ongoing battle for passive money between index trackers and ETFs, with the latter winning over the hearts and minds of advisers – for this quarter at least.
Multi-manager and Gold remain flat in terms of the quarterly sentiment shift, which could indicate advisers have allocated to client portfolio capacity in these areas – given the growth spurt of multi-manager funds during 2010 and the fact the price of gold has soared way above its historical average price band.
There is notable cross-over between sentiment for regions, asset classes and the IMA sectors in this quarter.
Emerging markets and Asia Pacific ex-Japan both received the most positive sentiment from advisers in both the regional category and the IMA sector category of the survey.
The positive shift in sentiment towards emerging markets has contributed to the view advisers are opting for a broad ‘outsource’ approach to regions and sectors, preferring not to allocate to specific countries or sectors that would support such funds in the crucial areas of Asia and Emerging Markets.
However, the greatest sentiment shift in regions since last quarter was for both UK and global allocations, each up 12 points.
This perhaps indicates advisers feel more assured the UK coalition government will remain intact and that Chancellor George Osborne’s deep cuts and higher taxes – only starting to be felt in 2011 – strike the right balance to keep the recovery plodding along while reassuring the markets that both domestic inflation and fiscal debt is under control.
From an investment appeal perspective, which of the following REGIONS could be of interest to you over the next three months (Jan-Mar)?
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