Aussies pessimistic on global stock market performance
Financial professionals in Australia are more negative on stock market performance for 2020 than global peers, expecting indices to fall over 12%.
A survey by Natixis Investment Managers of 2,700 financial professionals, including 150 in Australia, between 16 March and 24 April asked their expectations for year-end returns.
In Australia, respondents expected the ASX 200 to fall by 12% and the S&P 500 and MSCI World to fall by 13%. This was almost double the expectations by respondents globally who expected the S&P 500 to fall by 7% and the MSCI World by 7.3%.
Australia was the most pessimistic of all seven countries surveyed on the MSCI World but investors in Germany were more pessimistic on the S&P 500, believing it would fall 14.1% this year.
During 2019, the MSCI World returned 28.5% and the S&P 500 returned 31.6%. Since the start of the year to 16 June, the MSCI World had lost 2.2% and the S&P 500 had returned 0.2%.
The ASX 200 returned 23.4% during 2019 and lost 9.8% since the start of 2020.
Performance of MSCI World, S&P 500 and ASX 200 since start of 2020 to 16 June, 2020
Some 93% of Australian respondents said keeping on top of changing regulation was a challenge to their business and 90% said market volatility was a challenge.
They also believed individual investors struggled to understand their risk tolerance and had failed to realise the historic bull market was unprecedented rather than the norm. As a result, some 65% of Australian respondents thought individual investors were unprepared for a market downturn.
“This current crisis is unlike any we have seen before, and a result global macro themes including the China/US trade tension and falling oil prices have subsided, as local economic stimulus measures have helped to calm some investor concerns, stabilise returns and trigger the economy,” said Louise Watson, managing director and head of distribution for Australia at Natixis Investment Managers.
AUTHOR
Laura Dew
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
