A clear majority of fund selectors (71%) were positive on the macroeconomic outlook. The most recent National Bank of Belgium data showed the Belgian economy growing at its fastest pace since the beginning of 2011 in the fourth quarter of last year. GDP rose 0.4% from the previous three months and 0.9% from the year-earlier quarter.
In spite of this, only around one third (35%) says the Belgian government is competent on the economy, but this is higher than the reading from Spain.
The clearest trend in equity allocation was towards developed European equities. 42% are increasing their weighting, while just 8% are decreasing their weighting or don’t use the asset class. 20% to 25% of fund managers planned to increase their weightings in the US, UK, Asia and Japan. Emerging markets saw a similar reading among Belgian fund selectors, at 25%, in contrast to other countries where emerging market equities have continued to be unpopular.
The preference for passive funds was stronger than it had been elsewhere: Around 30% of Belgian fund selectors in European equities preferred a passive route.
Fund selectors showed a clear preference for riskier parts of the bond market, where yields were higher. No fund selectors planned to increase their weighting to developed market government bonds, but 29% planned an increased weighting to high yield and 17% to emerging market government bonds.
Around half (46%) of fund selectors are planning to increase their weightings in frontier markets over the next 12 months, while 58% are planning to increase their exposure to absolute return strategies.