Columbia Threadneedle Survey Shows Investors Still Bullish on Emerging Markets Even after 2017’s Stellar Returns
January 22 2018 - 8:30AM
Business Wire
Survey shows one-fourth of investors now
bearish on products that track passive U.S. fixed income
benchmark
A Columbia Threadneedle Investments poll of investment managers
and financial advisors reveals a positive investor outlook for
emerging markets (EM) even after the asset class was one of the
best performing in 2017. This year, 57 percent of respondents were
optimistic on EM, compared to 45 percent one year ago.
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Columbia Threadneedle Survey Shows
Investors still Bullish on Emerging Markets Even after 2017's
Stellar Returns (Graphic: Columbia Threadneedle Investments)
Findings from the latest Emerging Markets Investor Sentiment
Survey, a semi-annual poll designed to gauge sentiment around and
equity allocations to emerging markets, also show that 43 percent
of respondents plan to increase their EM allocation over the next
12 months.
The Columbia Threadneedle Investments EM Investor Sentiment
Gauge is at 760 out of 1000 for this latest poll, a 21 percent
increase from Q4 2016 and a 54 percent increase from Q4 2015.
“We are once again seeing investors demonstrate a strong level
of interest and a positive emerging markets outlook for the year
ahead,” said Marc Zeitoun, Head of Strategic Beta at Columbia
Threadneedle Investments. “Understanding the main drivers of growth
in these markets continues to be a critical element for investors
hoping to realize the full potential of the emerging markets in
2018 and beyond.”
The majority (62 percent) of survey respondents say their
current allocation to EM is about the same or higher than 12 months
ago, with only seven percent lowering their allocation versus 15
percent of respondents at the end of 2016. Most respondents
currently have either one-to-five percent (40 percent) or
five-to-10 percent (31 percent) allocation in emerging markets.
Investors differentiating fixed income strategic beta ETFs
from fixed income passive strategiesThe poll also gauged
sentiment on the outlook for strategic beta fixed income ETFs among
investment managers and financial advisors. According to the poll,
39 percent of investors currently own passive fixed income funds
that track broad-based U.S. fixed income benchmarks. Nearly
one-quarter of those respondents who own a passive fixed income
benchmark do not think it is appropriate for the market environment
in the next 12 months, while more than one-third are unsure.
With benchmark-based fixed income investing looking less
attractive for some advisors, almost half of respondents (40
percent) would consider allocating to fixed income strategic beta
ETFs. The majority of respondents were also closely aligned on the
issue of diversification within tax-exempt strategies, with 78
percent of respondents citing that they are “very concerned” or
“somewhat concerned” about this issue.
Zeitoun added, “Simply investing in a fixed income benchmark
won’t provide the right mix of investments that clients and
advisors need in the current market and interest rate regime.
Advisors need to consider broader fixed income solutions for
investors seeking diversification and total return, such as
strategic beta ETFs.”
The survey was conducted in December 2017 among 100 financial
advisors and investment professionals. The EM Investor Sentiment
Score is an average based on the following: negative EM outlook
scored as 0 points, neutral EM outlook scored as 500 points and
positive EM outlook scored as 1000 points for each respondent.
About Columbia Threadneedle Investments:Columbia
Threadneedle Investments is a leading global asset management group
that provides a broad range of investment strategies and solutions
for individual, institutional and corporate clients around the
world. With more than 2,000 people, including over 450 investment
professionals based in North America, Europe and Asia, we manage
$484 billion1 of assets across developed and emerging market
equities, fixed income, asset allocation solutions and
alternatives.
Columbia Threadneedle Investments is the global asset management
group of Ameriprise Financial, Inc. (NYSE: AMP).
For more information, please visit
https://www.columbiathreadneedleus.com/ and
http://www.columbiathreadneedleetf.com/. Follow us on Twitter.
1As of September 30, 2017.
The views expressed are as of the date given, may change as
market or other conditions change and may differ from views
expressed by other Columbia Management Investment Advisers, LLC
(CMIA) associates or affiliates. Actual investments or investment
decisions made by CMIA and its affiliates, whether for its own
account or on behalf of clients, may not necessarily reflect the
views expressed. This information is not intended to provide
investment advice and does not take into consideration individual
investor circumstances. Investment decisions should always be made
based on an investor's specific financial needs, objectives, goals,
time horizon and risk tolerance. Asset classes described may not be
suitable for all investors. Past performance does not guarantee
future results, and no forecast should be considered a guarantee
either. Since economic and market conditions change frequently,
there can be no assurance that the trends described here
will continue or that any forecasts are accurate.
Strategic Beta is a category of beta products designed to
outperform a market benchmark or provide a specialized exposure.
One cannot invest directly in an index.
Investment products are not federally or FDIC-insured, deposits
or obligations of or guaranteed by any financial institution and
involve risks, including possible loss of principal and fluctuation
in value.
Investment products offered through Columbia Management
Investment Distributors, Inc., member FINRA. Advisory services
provided by Columbia Management Investment Advisers, LLC.
CT-MK (01/18) 1999585
© 2018 Columbia Management Investment Advisers, LLC. All rights
reserved.
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version on businesswire.com: http://www.businesswire.com/news/home/20180122005195/en/
For Columbia Threadneedle Investments:Liz Kennedy,
617-897-9394liz.kennedy@ampf.comorMorgan Cozatchy, 212-279-3115 x.
273mcozatchy@prosek.com
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