According to the inaugural Allianz Global Investors (AGI) RiskMonitor Survey – which gathered the views of 390 chief investment officers, managing directors and portfolio managers during the summer of 2013 – some 56% of European investors do not expect central banks to raise interest rates towards their long-term historical averages until 2016 at the earliest.
In contrast, about two-thirds of survey participants from Asia ex-Japan and North America – and almost three-quarters from Japan – forecast rate rises before the end of 2015. This likely reflects the superior economic performance of these regions, compared with Europe, Allianz notes.
Investors also display conflicted attitudes towards ultra-loose monetary policy. While 59% say low interest rates have a positive impact on near-term GDP growth, similar proportions expect increases in inflation and systemic risk, as well as a negative effect on the health of retirement savings.
In addition, two-thirds of respondents say the monetary policies of developed nations during the past five years have increased the risk of “abnormal price distortions” in fixed income markets.
The report also finds that, over the next three years:
- Tail risk is viewed as the greatest threat to investment performance;
- More than 90% of investors forecast that equities will generate returns, with average expected annual gains of 6%; and
- Over half of respondents expect the regulatory climate to become less favourable.
A copy of the RiskMonitor Survey can be downloaded from the Allianz Global Investors website, here.