Posted inSOUTHERN EUROPE

Basque fund selectors go global

The equity bias of Bilbao-based fund selectors is reflected in their bullish macroeconomic outlook. Eight in ten investors take a positive stance towards the economy, a number twice as high as a year earlier. While the IMF predicted this week that the world economy will grow 3.6% this year and 3.9% in 2015, 58% of Basque fund buyers will step up their allocation to global equities, also almost twice as many as in 2013. Popularity of European equities, already the most popular asset class a year ago, increased further with 71% of delegates increasing their allocation.

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EM sentiment mixed

Emerging market equity sentiment is also on the rise, with 43% of the delegates increasing their allocation and only 10% decreasing. Interestingly, Asian equity sentiment followed a reverse pattern, with the number of delegates stepping up their allocation falling from 48% to 29%. Though 42% of delegates are not using the asset class, frontier market equities are quite popular among the fund selectors already invested in it. 23% will increase their allocation, while none are reducing exposure. Japan equity sentiment bounced up remarkably. A quarter of delegates will step up their allocation, up from just 8% a year ago.

US out of favour

US equities have largely fallen out of favour with Basque fund selectors. Only 5% is planning to increase their exposure in the coming twelve months. Most seem to wait and see for now, with two thirds of the attendees choosing to hold their allocation stable. Considering investment tactics, about a third of delegates prefer long/short to long-only across all equity classes.

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Multi-asset approach

Fixed income sentiment is now even more bearish than a year ago, as the appetite for riskier bond categories has now also fallen dramatically. Sentiment on high yield was neutral a year ago, while now only 14% are buying and 38% are selling. Appetite for emerging market debt has even reversed more drastically. Besides that, an audience poll revealed that most Basque fund selectors prefer to have exposure to fixed income through multi-asset products, rather than via traditional bond products.

Click here to see a slideshow of photos taken at Expert Investor Bilbao.

Platinum members can additionally view a full breakdown of the event voting data here.

 

Part of the Bonhill Group.