EUROPE - Most European fund managers believe that Germany is heading for a double-dip recession.
Some 63% of managers polled in the monthly Morningstar survey thought that it was ‘likely’ or ‘very likely’ that Germany’s troubled economy would plunge into another recession soon.
Close to 80% said that Germany’s problems are impacting other eurozone economies, in some cases severely so.
But despite these concerns most fund groups remained bullish about the euro’s prospects over the next 12 months although, in terms of stock market performance, Europe (ex-UK) fell to third place from top spot last month, behind the US (1) and Asia (2).
Fund managers were also positive on equities again with 82% of groups expecting global markets - as measured by the MSCI World Index in euros - to be in positive territory, although only by 5% this time, compared to last month’s 10%.
“It also seems that fund groups expect investors will become less risk averse following the recent gains in the stockmarkets,” said Niklas Tell, editor-in-chief of Morningstar Europe.
“In previous months most groups have predicted the bulk of money would flow into fixed income and balanced funds over the next year. This month the answers point to an even flow across different types of funds - balanced, equity, fixed income and others.”
The TMT sector rebounded this month. Some 32% of respondents expected the battered sector to be the best performer over the next year. The MSCI Information Technology index is up 13%, in euro terms, over the last month.
“A similar faith in this sector has not been seen since our April survey,” added Tell.
Morningstar surveyed polled 73 fund managers, representing E54bn assets under management.
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