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Ongoing challenges in
This quarter, managers’ bullishness for U.S. large cap growth equities stood at 69% (up from 58 percent bullishness in the December IMO), and on the emerging markets front, there was a 10 percentage point increase in bullishness from last quarter to 66% in the current survey. Across style and cap levels, the latest IMO survey demonstrated managers’ increased bullishness for equities.
“Managers are seeing opportunities to take on moderate risk for what could be attractive return opportunities. In fact, in the latest IMO survey we are seeing that they are more willing to invest in areas where, even six months ago, they were showing nervousness,” said
Reduced risk aversion and a search for better returns may also be driving the drop in bullish sentiment for corporate bonds and other fixed income asset classes in the latest iteration of the IMO. Manager bullishness for corporate bonds was 32% and U.S. Treasuries was 4%, reflecting a drop of nine and five percentage points, respectively, from last quarter.
As a leader in multi-asset investing,
As a result of the ongoing challenges in
Specifically, managers indicated that the challenges in
“Most managers are anticipating a weak currency and the effects of a moderate recession in
In the latest survey, nearly a quarter (22%) of managers say they plan to increase their exposure to
“Managers’ take on ongoing economic woes in
Managers see opportunities in the technology sector
Technology maintained its position as the most-favored sector for the 13th consecutive quarter, with 81% of managers expressing bullishness for technology in the latest survey, up from 73% in December. According to Russell, manager enthusiasm for the technology sector as it relates to
“Technology companies tend to be big exporters and therefore one might expect less enthusiasm for the sector in light of a European recession – but this is where active management can have an edge,” said Carroll. “The best managers are actively seeking out opportunities in specific companies within the sector where they are able to identify strong potential growth prospects.”
Clouds clearing over real estate?
Real estate saw a 12 percentage point jump in bullishness this quarter to 45%. While this figure is still low in comparison to managers’ responses on other asset classes, it represents an all-time survey high for real estate.
According to Carroll, “Optimism around real estate is likely a reflection of the improving fundamentals in that market, particularly in areas such as core commercial real estate. REITs have rebounded from their lows during the financial crisis and are within reach of their all-time highs – this is certainly a positive development as the real estate asset class can deliver useful diversification.”
More about Russell’s Investment Manager Outlook
Prior to the end of each quarter, Russell polls a sample of investment managers to collect top-line opinions about their outlook for the direction of the markets, sectors and asset classes to watch, and trends on the horizon that could impact investment strategy. In addition to the quantitative results, the Investment Manager Outlook provides qualitative analysis and commentary from one of Russell’s senior investment strategists.
More information about the IMO, including a video and a full report of findings, can be found at: http://www.russell.com/US/market_insights/Investment_Manager_Outlook/investment_manager_outlook.asp.
Russell has about
Russell is headquartered in
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
This is not an offer, solicitation, or recommendation to purchase any security or the services of any organization.
Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than U.S. and longer established non-U.S. markets.
Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment, non-payment and increased default risk, is inherent in portfolios that invest in high yield ("junk") bonds or mortgage backed securities, especially mortgage backed securities with exposure to sub-prime mortgages.
Stock/equity investors should carefully consider risks such as market risk when investing. There are no guarantees when it comes to individual stocks. Any stock may go bankrupt, in which case your investment may be worth nothing.
Technology stocks are primarily companies that serve the electronics and computer industries or that manufacture products based on the latest applied science.
The financial services sector consists of companies that provide financial services including banking, finance, life insurance, and securities brokerage, and services companies.
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