Investor confidence in US, Europe spikes: Report
Confidence in developed economies like North America and western Europe has shot up since last year, according to a survey of investors across 23 countries.
Some 27 percent of the 15,749 investors surveyed by asset management company Schroders said western Europe offered the best prospect of returns in 2014, up from just 10 percent last year. Meanwhile, almost one-third (31 percent) of investors saw North America delivering the strongest returns, up from 18 percent in 2013.
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Commenting on the results, Schroders Vice Chairman Massimo Tosato noted the strong performance of the U.S. economy towards the end of 2013. U.S. GDP (gross domestic product) rose by around 3 percent in the last three months of the year, despite the government shutdown in October.
Tosato warned, however, that global GDP growth – which the International Monetary Fund sees at 3.7 percent this year – remains weak when compared to recovery rates from previous recessions.
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"This growth will not be uniform across sectors, economies or regions, particularly given that significant weakness remains in some euro zone countries, and also in emerging markets where the withdrawal of quantitative easing is weighing heavily on stock markets," he said in a news release on Wednesday.
"We are in a still-transitioning global economy and taking an active investment approach remains key for investors."
Despite Tosato's concerns, the Schroders survey showed rising appetite for equities – often viewed as a sign macroeconomic optimism. Some 70 percent of investors surveyed planned to invest in the stock market in the coming 12 months, saying equities was the asset class they saw delivering the greatest growth.
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Investors were also more internationally focused than in 2013, with the majority planning to invest in equities outside their national markets.
"This year investors are taking a more global view as they seek to capitalize on new growth opportunities. However, the shift away from domestic assets to ones outside of investors' home markets means that many will be pushing the boundaries of their knowledge," warned Tosato.