The Franklin Templeton Global Investor Sentiment Survey, which analysed investor sentiment across 22 countries, found 45 per cent of Australian investors expect the local equity market to offer the best equity returns in the next 12 months.
This was followed by Asia, with 28 per cent of Australian investors predicting Asia will offer the best equity investment opportunities in the next year.
The survey also found Australian investors expect strong performance in the property market this year, with 34 per cent planning to increase their investment in real estate.
Seventy per cent of the respondents predict property will be one of the top three performing assets.
While Australians plan on making few changes to their portfolios, on average they expect the average annual rate of return to be 8.4 per cent up from 8.1 per cent in 2013.
A majority are also optimistic about their finances, with 82 per cent expecting to reach their financial goals.
Franklin Templeton Investments head of advisory services Jim McKay said investors are increasingly recognising the importance of maintaining an allocation to equities in meeting their long-term goals.
However, he said there is still some way to go in educating investors about their fixed income investments.
“With interest rates in key developed markets at historically low levels, fixed income investors seeking higher yields should be considering a broader range of countries outside of the traditional G3,” said Mr McKay.
“Many of these offer better economic growth prospects and have increasingly sound government budgets, as well as the potential for higher returns and currency appreciation.”
