Eight of 19 interviewed asset management groups expect returns of more than 5% from Asia ex-Japan equities over the next 12 months, compared to only three back in December last year. The rebounding Asia-Pacific sentiment contrasts with fund managers’ view of the emerging markets as a whole. Return expectations for the asset class have come down steadily over the past seven months.
Emerging markets divide
This is not quite in line with the cautious rediscovery of the emerging markets seen among fund selectors in various European countries during the past months. During recent Expert Investor Europe research trips and events in Denmark, Germany, Finland and France it appeared appetite for emerging market equities is recovering strongly after last year’s massive outflows. Enthusiasm for Asian equity products hasn’t shown a similar rebound as of yet.
Last month fund managers had become surprisingly upbeat about expected returns from the US equity markets. This keenness has loomed somewhat since, possibly on the back of continued flat line growth in the US over the past months. Fund managers still believe in US equities though, with more than 3 times more bulls than bears in the asset class.
