According to investment bank Barclays Capital’s survey equities are the most sought after hedge against inflationary pressures, while gold was the second most popular choice.
The survey covered clients of wealth management organisations with combined assets under management of over USD 5 trillion.
Equities continue to be the most recommended asset by wealth managers for the next six months to produce a global balanced-risk investor portfolio, it added.
This year investors are being advised to hold an average of 37 per cent of their portfolio in global equities a marginal decline from 42 per cent a year ago, the report said.
US equities are more favoured today, with an average allocation of 10 per cent, up from 5 per cent three years ago.
Moreover, 65 per cent of respondents said they are likely to raise this allocation over the next six months.
However, advisors are recommending a reduced allocation in equities in Latin America, the Middle-East, Eastern Europe and Africa compared to a year ago. The recommended asset allocation for these regions has fallen from an average of nine per cent to just five per cent, the report said.
A large majority of respondents expect revenues to grow by more than five per cent in Asia, excluding Japan, over the next two years, wherein the most attractive countries for business expansion in the region would be China and India.
“We continue to see a positive attitude among investors for Asia’s emerging markets. It’s no surprise that China and India appear as the top picks for growth with the outlook for these economies remaining upbeat,” Barclays Capital Head of Distribution for Asia Pacific Philippe El-Asmar said.
The outlook for Asia’s developed nations, however, is not so bright as Australia and South Korea’s revenue growth is forecast to be either negative or less than five per cent over the next two years.
One of the more notable shifts in client sentiment following the financial crisis was the increase in demand for more vanilla or transparent products.
“We now see risk appetite increasing as investors begin to feel more comfortable with the recovery of the global and regional economies,” Barclays Capital Head of Investor Solutions for Asia ex-Japan Peter Hu said.
Meanwhile, with global economies on a recouping mode, the percentage of respondents who felt the challenges of doing business across all categories were ‘extremely’ or ‘very difficult’ have reduced as compared to 2010.
“With global economies on the mend, wealth managers say that the business environment is changing. Clearly these challenges to doing business are a permanent feature of life but it is encouraging for the industry that conditions seem to be normalising, albeit with increased pressure on costs,” Barclays Capital’s Philippe El-Asmar said.