Almost two third of the fund buyers attending said they would rather buy value stocks with steady cashflows than cyclical, more risky growth stocks. The remaining third said they had no preference.
Cautious by nature?
The cautiousness of Finnish equity investors might be caused by their pessismistic macro-economic outlook. The Finns stand out in Europe in this respect, with more than half having a neutral or negative view. One fund selector said the unusual value bias of the audience could be explained by the large representation of pension funds and insurance companies on the Finnish market. ‘This kind of wealth managers are less prone on risk-taking.’
The appetite Finnish investors expressed for global equity income products looks like a logical consequence of the preference for value in developed world stocks. Four in ten fund selectors said they will increase their allocation to these products in the next 12 months, while only 6% said they will decrease exposure. A quarter of delegates said they will increase their allocation to long/short equity funds, but more than half does not use alternative equity strategies at all.
Firm faith in US dominance
While Finnish fund selectors are not fond of US growth stocks and are undecided about what to do with their allocation to US stocks, they firmly believe the United States will remain the driving force in the world economy, an audience poll showed.
Its outcome triggered an interesting debate among the five panellists attending the conference. While Oliver Bell, who manages the T. Rowe Price Middle East & Africa Fund, challenged the audience’s view by underlining the waning influence of the US in Asia and the Middle East, the two other emerging market managers on the panel were convinced American economic dominance is there to stay.