EUROPE - Investment managers predict European equities will continue to recover this year, a survey by Mercer Investment Consulting shows.
The research – based on replies from 55 European fund managers with £3.4trn assets under management – showed that managers expect returns of 8% for UK equities and 10% for European equities.
Average annual returns are expected to be between 5% and 10% over the next three years. This compares with expected global equity market returns of 8% throughout 2004, according to separate research by the consultant.
Most managers believe fixed interest yields will rise but some think bond returns will be negative. UK and European government bonds are forecast to produce returns of 3% in 2004, with similar returns expected over the next three years.
Over the next three years, managers expect to see increased demand for tactical asset allocation. Managers also predict that hedge funds and private equity will be the major growth areas within the alternative investment sector. Emerging markets also remain in favour with forecasted returns of 12.5%.
Head of UK investment consulting Andrew Kirton said:
“Low inflation, increased demand for alternative and absolute return assets, a testing regulatory environment and greater emphasis on shareholder participation will all be testing but there is a little out there for specialist players.”
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.