Chief investment officers (CIO) from Australia’s major asset management firms have become more positive about investment performance over the next 12 months, according to the Financial Services Council (FSC).
The association’s quarterly CIO Investment Index showed officers were much less worried about risks associated with the United States economy than they were last quarter, and more focused on the Asian region.
The index scored a reading of 25 in the three months to December, up from 11 in the last quarter. The gauge has a range of -100 to 100.
“There is now increasing attention being given to the risk of a slowdown in China over the next 12 months,” FSC chief executive John Brogden said.
“The possibility of a default in the Eurozone still weighs on the minds of CIOs, however sentiment towards the region is improving as fears of a contagion risk fail to materialise.
“On the whole, sentiment among CIOs is fairly positive with many respondents noting that sufficient risk is already built into investment markets.”
Specifically, CIOs expect Australian and international equities to again be the best performers over the next year.
“Australian property is expected to perform slightly better than international property, a reversal from last quarter,” the index report said.
“Australian fixed-income assets are expected to perform better than international fixed income, which was the only asset class to receive a negative score this quarter.”
But while this quarter’s findings indicated growing optimism among CIOs, the risk of a slowdown in the Chinese economy is a developing concern for the year ahead.
“Over the longer term, CIOs consider inflationary pressures and moves to control these, especially in China, to be risk factors. Possible volatility associated with the increasing significance of emerging markets is also of concern,” the report said.
Companies in the FSC CIO Investment Index include Aberdeen Asset Management, Axa Australia, BT Investment Management, Equity Trustees, Franklin Templeton Investments Australia, nabInvest and Perpetual.
