“Investors are tired of low yields in safe-haven assets so equities, both in developed and emerging markets, are the natural place to look,” said Ciaran Woods, an analyst at Citigroup Inc. in London and a poll participant. “We have a reasonably constructive base for riskier assets this year.”
Forty six percent of investors intend to increase holdings of emerging market equities in the next six months, compared with only eight percent planning to reduce exposure, the survey found.
A majority of those quizzed say bonds will offer the worst returns over the next year. Almost three-in-five expect to reduce their holdings of U.S. Treasury securities in the coming six months, while less than one in 20 plan on an increase.
The yield on the 10-year Treasury note stood at 1.84 percent at 5 p.m. in New York on Jan. 18, according to Bloomberg Bond Trader pricing. Since 1994, it has averaged 4.7 percent.
Bond Returns
“The current low yield from bonds, and the potential for at least the start of talk of a rate increase towards the end of the year, could result in much worse returns from bonds compared to stocks,” Fabien Ouellette, Associate Portfolio Manager at ETF Capital Management in Toronto, said in an e-mail. Ouellette, who took part in the poll, added that his comments do not necessarily reflect his company’s opinions.
The U.S. came out on top with 38 percent when investors were asked which one or two markets would offer the best opportunities over the next year.
“The U.S. is the best place to invest for the next five years because of the commitment by the Federal Reserve to inflate the economy,” Ron Anari, who took part in the poll and who is a senior vice president at ICAP Plc. in Jersey City, New Jersey, said in an e-mail.
Fed Chairman Ben S. Bernanke, who received a favorable rating from seven out of 10 investors in the poll, has pledged to keep purchasing Treasury and mortgage-backed securities until the outlook for the labor market improves “substantially.”
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