Australian shares look likely to maintain their status as an investor safe haven compared with other share markets, a panel of the financial services industry’s top chief investment officers has revealed.
The Morningstar expert asset allocation panel, an initiative by ratings house Morningstar, brings together six asset allocation specialists from around Australasia every quarter.
The panel, which meets to debate a 12 month outlook for each of the six major asset classes, found its most recent meeting focusing on the impact the terrorist attacks on the United States would have on share prices.
Chair of the panel, Economics New Zealand managing director Donal Curtin says the immediate short-term outlook for markets over the next few months is particularly unclear. He says international fixed interest markets do not look attractive as a result of potentially large bond issuances in the key US market.
The main concerns the panel outlined is that risks include a weakening of consumer confidence in the US, the direct and indirect effects of the terrorist attacks on business activity, and the potential impact of future military or political action.
However, on an investment front, Curtin says there is the distinct possibility that further flows out of shares and into safer havens such as cash and bonds will occur in the short term.
He says on the other hand the long term outlook for shares is brighter in the next 12 months, with strong economic conditions coming through a number of countries, including the US.
Curtin says the panel’s view is that an increased exposure to international shares is definitely warranted for investors looking for capital growth over the medium term.
