Perhaps unsurprisingly, the only nation where a majority of fund selectors disapprove of European QE is Germany. According to data gathered at the Expert Investor Deutschland event in Frankfurt in May, 56% of local fund selectors believe launching QE in Europe was a bad idea. This opinion isolates the Germans from their peers on the rest of the continent. From north to south, there is widespread support for QE, ranging from 64% in the Netherlands and Belgium to 94% in Finland.
When it comes to the question what QE is actually going to give a boost, the Germans fit in better with their fellow Europeans. In May, 56% said equity markets would benefit most, followed by bond markets with 34% of the vote. These expectations are very similar to those expressed by Belgian fund selectors in January (see chart below), indicating investors expect the asset-inflating benefits of QE to kick in gradually, even though European equity markets boomed at almost unprecedented pace from January to April.
And what about the economy?
Though QE is supposed to kick-start the European economy by stimulating investment, ironically very few investors believe this is the main effect the programme will have. In most countries, only about 10% of fund buyers believe QE will chiefly benefit the European economy. The one exception is Iceland, where 52% of fund selectors believe it will. But the islanders might just have been in an extremely optimistic mood when they were questioned in June, just a few days after the Icelandic government had announced it intended to lift the capital controls.
While most European fund buyers believe QE will benefit equity markets, as it undoubtedly has in the beginning of the year, considerably fewer think bond markets will profit.
In most countries, less than one in five respondents to our surveys believe bond will benefit most from QE. The only country which bucks this trend is Portugal, which happens to be the country in Europe where investors have the highest allocation to fixed income.
Brushing aside the fact that bond yields are already so low that they can hardly decline further, almost four in 10 Portuguese fund selectors believe bonds will profit most from QE.