A survey of 11,113 investors around the world by Franklin Templeton shows that they are more optimistic for prospects this year but also reluctant to take riskier bets. It also showed that the UK is seen as the star equity market this year.

A survey of 11,113 investors around the world by Franklin Templeton shows that they are more optimistic for prospects this year but also reluctant to take riskier bets. It also showed that the UK is seen as the star equity market this year.

The 2014 Franklin Templeton Global Investor Sentiment Survey, conducted among 22 countries across Africa, Asia Pacific, the Americas and Europe, showed that the percentage of respondents who think that the UK will deliver the best equity returns in 2014 and over the next 10 years has increased significantly.

Although UK investors expect Asia to deliver the best equity returns in 2014 as well as over the next 10 years, the number of respondents holding this view is down significantly, by 11 per cent, from last year. Some 31 per cent of respondents believe that the best equity returns will come from Asia, down from 42 per cent in 2013, while 29 per cent of respondents believe that the best equity returns will come from the UK, up from 23 per cent in 2013.

Elsewhere, there has been a significant decrease in the number of investors who think precious metals will perform best both in 2014, and over the next 10 years, while there has been a significant increase in the number who think equities and property will perform best in 2014.

The percentage of respondents who think precious metals will perform best fell from 33 per cent in 2013 to 15 per cent in 2014, while the percentage which thinks equities and property will perform best rose from 21 per cent to 27 per cent.

DIY
The findings also show that the majority of UK investors surveyed (73 per cent), intend to use their own research when deciding where to make their next investment, with a relatively modest 23 per cent intending to use a financial advisor. Investors with household incomes of £70,000 ($115,603) or more are the most likely to pay for the services of a financial advisor, whilst investors aged from 25-34 are most likely to seek help from family or friends.

“We are excited by the growing investor optimism for equities and for UK equities in particular. These findings are supported by recent IMA [Investment Management Association] figures which show that equity was by far the best-selling asset class in 2013 with net retail sales of £11.4 billion – the highest since 2000 (£14.7 billion). Equity has been the best-selling asset class every month since September 2012 in all except one month. By region, UK equity funds were the second best-selling in 2013 with net retail sales of £2.9 billion – the highest since 2001,” Ian Wilkins, Country Head, UK, said.

Global findings
Five years after the onset of the 2008-2009 market downturn investors continue to show signs of risk aversion, despite an optimistic outlook for the future, the survey found.

Globally, 52 per cent of investors are planning to become more conservative with their strategies this year, taking on less risk with the potential of earning lower returns. However, this risk aversion is less pronounced than last year when the annual survey showed that 57 per cent of investors planned to be more conservative with their investments.

The survey, conducted by ORC International, included responses from people in the following countries: Brazil, Chile and Mexico in Latin America; Australia, China, Hong Kong, India, Japan, Malaysia, South Korea and Singapore in Asia Pacific; France, Germany, Greece, Italy, Poland, South Africa, Spain, Sweden and the UK in Europe, and the United States and Canada in North America.

Survey respondents were between the ages of 25 and 65 in Latin America, Asia Pacific and South Africa and 25 and older in Europe and North America. Respondents were required to own investable assets, such as stocks, bonds, mutual funds, etc.

The survey was completed from 2 to 15 January, 2014, in all countries.