The survey showed that 69% of fund selectors plan to increase their weighting to developed European equities over the next 12 months, but over half (51%) prefer a value strategy and 44% prefer large cap. Almost all (93%) prefer an active approach to European equities over a passive approach.
The continued risk aversion was also shown by the increasing popularity of low volatility and absolute return strategies. 63% of fund selectors said they planned to increase their allocation to low volatility strategies over the next 12 months and 56% to absolute return strategies.
A similar pattern was seen for US equities; where 34% of Spanish fund selectors plan to increase their weighting over the next 12 months. 48% prefer a value strategy, compared to 40% who preferred a growth strategy. Large cap equities were preferred by 56% of fund selectors, which may be a reflection of the strong performance of US small and mid cap equities over the past year.
Sentiment towards global emerging market equities remained weak. Just 19% of fund selectors planned to increase their weighting, while 31% planned to decrease. Joachim Klement, chief investment officer at Wellershoff & Partners, says that while some value has emerged in emerging market equities, it is not the time to buy yet: “We may be selectively reinvesting in the coming months on the basis that there is too much pessimism priced into markets.”
In spite of an improvement in the economic outlook for Spain, 73% of fund selectors say the current government is not competent to run the economy. The last set of Eurozone economic statistics showed the Spanish economy expanding by 0.3% in the last quarter. 72% of selectors say they are positive on the economic outlook.