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High Net Worth European Investors Rally Behind Equities - JP Morgan Private Bank

Amisha Mehta, Reporter, London, 10 April 2015

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Just over half of high net worth European investors picked equities as their top asset class for 2015, according to a survey by JP Morgan Private Bank.

Over half of high net worth investors in Europe are backing equities to be their best-performing asset class over the coming year, according to JP Morgan Private Bank.

The 51 per cent of investors who picked equities as their favoured asset class was a slight dip from the 58 per cent holding the same view last year. 

“There is a strong consensus that equities will continue to be the outperforming asset class, with more than half of European clients agreeing,” said JP Morgan Private Bank's global head of investment strategy, César Pérez.

Pérez highlighted that the impact of quantitative easing on equity markets will be highly selective and depended on exposure to a weaker currency, as well as export potential.

Oil came in second place as investors eyed opportunities following the plunge in prices over the second half of 2014 and those believing it could outperform this year tripled from a year ago to 18 per cent.

As for optimism towards regional equity markets, the US came out on top taking 30 per cent of the votes. Southern Europe and Western Europe followed close behind with the support of a quarter of respondents and China/Asia came in fourth place with 11 per cent. Only 6 per cent believed Japan was likely to outperform over the next 12 months.

“The growth differential between the US and most other developed markets has resulted in monetary policy divergences. While the Fed is on a path toward normalisation, both the Bank of Japan and the ECB will be increasing the size of their balance sheets,” said Pérez.

“Global growth is recovering and is projected to rise by 3.5 per cent to 3.7 per cent this year, with developed markets driving the additional growth.” 

Following a volatile geopolitical period, the rise of radical political parties in European elections was flagged as the greatest threat to markets in 2015 by 33 per cent of investors. 

Meanwhile, UK investors showed particular concern for the decline in China's property market and over a fifth of investors said the loss of credibility for the European Central Bank was the top threat this year.

JP Morgan Private Bank took its data from a private client survey, conducted between January and March, of 900 high net worth investors across 14 cities in Europe.  

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