The Australian economy is facing another year of good growth and relatively stable interest rates according to the 2004 Mercer Investment Consulting Fearless Forecast survey based on the opinions of leading investment managers.
What is more, the survey reveals that around 50 per cent of the managers surveyed believe that the new choice of fund regime will represent a positive development for fund members, with more than 68 per cent believing that alternative investment mandates will increase this year.
The Fearless Forecast reinforces analyst warnings to super fund members not to expect a repeat of the double digit returns recorded in 2004, Mercer’s Fearless Forecast says that the Australian investment managers surveyed are in general agreement that local and global equity markets will deliver reasonably strong returns this year, averaging 8.6 per cent for domestic equities and 8.2 per cent for international stocks.
It points out, however, that this is lower than the returns for 2004, especially where domestic equities are concerned.
The survey says that it has become very clear that listed property securities are the least favoured asset class for 2005, with 30 per cent of those surveyed believing they would be one of the bottom two performing sectors.
The survey respondents listed corporate profits, the domestic economy and the global economy as being the top three issues that would drive equity market returns this year.
Surprisingly, China came fourth, with politics, corporate governance, terrorism and inflation considered likely to have a lower impact on equity markets.
