EUROPE - Some 50% of European fund managers expect tensions between America and Europe to hit global stockmarkets over the next three months.
Latest data from ratings and research firm Morningstar showed uncertainty was driving managers to seek the relative safe haven of more defensive stocks, with the healthcare sector topping the table.
It also found that an additional 73% saw the US current account deficit as a serious problem for the global economy.
“Uncertainties, ranging from geopolitical tensions to global economic growth, seem to have led fund management groups to larger companies and more defensive investments,” said Niklas Tell, Morningstar’s editor-in-chief, Europe.
“On a sector level, where telecoms gained most support last month, healthcare is now the preferred sector with 24% saying it will be the best performer over the next 12 months.”
The survey polled 63 of Europe’s biggest fund managers with an average E57bn assets under management and offering a total of 83 funds.
On a more positive note, it found that 79% of managers still had some confidence in the ability of the American economy to drive global growth.
Overall, managers were more optimistic than last month on the performance of global stockmarkets over the next 12 months with 38% expecting stocks to rise by 10%+.
“However, fund manager optimism has proved misplaced on numerous occasions over the past three years,” warned Tell.
Large caps are expected to be the best performing section of the market with 52% of fund groups saying they will outperform small caps. When questioned about value versus growth over half remained neutral.
Some 30% of managers said growth will be the best performing style over 2003. Asia (ex-Japan) continues to be the market most fund groups expect to perform best over the coming year.
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