POWERED BY MOMENTUM MEDIA
Fund managers seek new avenues for higher yield
For the remainder of 2012, global managers remain neutral on both bonds and equities as they broaden their search for higher yield in a low growth environment.
That's according to the latest HSBC Fund Managers' Survey, which found that 60 per cent of fund managers - representing 16.7 per cent of global funds under management - were neutral on equities for the December quarter, with 40 per cent found to be bullish, due partly to the European central banks' easing policy supporting a desire among this group for more risky assets.
The report also found 60 per cent of fund managers are overweight in North American equities, while 57 per cent maintained neutral views on China amid policy easing and a predicted slowdown in growth.
Similarly, 75 per cent of respondents were bullish when it came to Asian bonds.
Bonds remained attractive particularly for yield-seeking investors, but equities have "long-term appeal underscored by the attractive dividend yield pickup over bonds", according to Geoff Pidgeon, head of global asset management for HSBC Bank Australia.
"This is quite a large problem for bond investors, where you've got returns on US and Euro bonds at an all-time low," he said.
"Typically, investors in times of stress will flock to these safe haven markets, but right now, and probably for the first time in history, these markets aren't safe anymore."
Global emerging market bonds continue to be favoured by 70 per cent of fund managers (up from 50 per cent in the preceding quarter), and 90 per cent were found to be overweight in high yield bonds, according to the survey.
The resilience of Asia's corporate debt fundamentals is now making Asian debt and bonds more appealing to investors, Pidgeon said.
AUTHOR
Staff Writer
Money Management staff writers are writers who contribute to the website from time to time. If you would like to discuss the content contained within this article please contact us.
Recommended for you
New research has shown that investing in alternative assets and using active management has, to this point, delivered strong results for Australian super funds.
Australia’s $4 trillion superannuation industry is fundamentally reshaping the nation’s external accounts, setting the stage for a more sustainable current account surplus despite weaker commodity markets.
Rest has expanded its portfolio of renewable energy infrastructure by supporting a Victorian solar farm and battery project.
Economic growth was weaker than expected, once again highlighting an economy largely sustained by population growth and government spending.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
