The Certitude Global Investing Intentions Index shows investors even more determined to go global
Investors look to global markets.
The number of leading investors planning to increase their exposure to overseas assets rose in July, according to the Certitude Global Investing Intentions Index (CGIII) which was released today.
The index, which tracks the net demand for global assets, increased from 157 points in June to 169 points in July (or by 8% month on month). The intention for more global assets was even higher among high net worth investors, rising by 9% to 177 points.
These are just two of the key findings from this month’s CGIII, produced by Investment Trends and collating the views of nearly 800 leading investors, including high net worth individuals, self-managed super funds and higher income investors.
In other findings, 43% of those surveyed agree that they need more international assets in their portfolio, up from 38% last month.
This increased appetite for global reflects their performance expectations for global markets. When asked where they expect global markets to be in a year’s time, 74% of investors said they expect the market to rise, compared to only 15% who expected a decline. Again, these figures showed investors to be more bullish this month than last, when 68% expected overseas markets to rise, and 19% anticipated a decline.
Craig Mowll, CEO of Certitude Global Investments said: “Last month we saw a strong indication by Australian investors that they needed and expected to have greater international allocations within their portfolios, and this month that intention was signalled even stronger”.
“Investors are understandably reacting to significant data out of the major international economies. Concerns about the currency saw the US lose some favour this month, and demand for emerging markets also dipped below the levels recorded last month. While preference for single region investments waned, interest in multi-region global funds increased. After the US, these kinds of funds are now the second most sought type of international exposure.”
Actively managed funds preferred method of investment
When asked how they intended to increase their overseas exposure, investors’ preference for actively managed international funds edged out ahead of direct purchases of shares in companies listed overseas, which was the most preferred way last month.
Mr Mowll said that this indicated a belief by investors that an expert fund manager is the best choice to help them make optimum investment choices.
“And when it came to the types of overseas investments investors were looking for, equities, at 69%, remained the favoured choice. Interestingly, global property showed resurgence with investors rating this the second highest asset class to which they would like exposure,” he said.
Volatility less of a barrier to overseas investments
Market volatility receded as the main barrier facing investors considering overseas investments.
Meanwhile, threshold issues to international investment saw an increase in July with 15% of investors citing ‘lack of funds’ as their single main deterrent and 12% citing lack of information.
Timing for investment closer
Mr Mowll concluded by saying that when it came to timing for overseas investment, investors’ confidence in overseas economies was very much reflected in their decision to move sooner rather than later.
“32% of investors who are looking to invest globally plan to do so within the next 3 months, compared with 27% last month. With concerns around volatility receding, they’re looking to capitalise on the opportunities they see in the near future.
“The results from this month’s CGIII show that it is an excellent tool for understanding and monitoring the changing views of leading Australian investors. And these views are often a leading indicator of where and when other Australian investors might move to specific markets and assets classes around the globe,” Mr Mowll said.
July CGIII – Key findings
- The Certitude Global Investing Intentions Index increased by 7.6% in July, up to 169 from 157 in June.
- 43% of Australian investors believe they need more international assets in their portfolio, up from May and June 2013.
International funds covering multiple regions became more popular as markets of interest, and now rank second, behind the US/North America. - 69% of investors are most interested in equities for their overseas exposure, but property is also back on investors’ radar.
- Investors are bringing the decision to invest globally forward, with approximately three in ten of investors looking to invest globally within the next 3 months.
- While volatility receded as the main barrier, threshold issues saw an increase with 15% of investors citing ‘lack of funds’ as their single deterrent and 12% citing lack of information when considering overseas investments.
