Investment trust managers are proving more bearish than advisers on their predictions of equity move...
Investment trust managers are proving more bearish than advisers on their predictions of equity movements next year, particularly for the UK market.
Polls conducted by the AITC, of 32 trusts representing a fifth of the industry by assets under management, and IFA Promotion among advisers at its 10,000 member firms, showed opinion between the two groups is diverging.
Last year, IFAs and investment trust managers both expected the FTSE 100 to close between 4,500-5,000 by the end of 2004. As of 14 December it sat at 4722.8.
There is no such consensus for 2005, with half of IFAs expecting the FTSE 100 to close between 5,000 and 5,500 by the end of 2005 compared to just 28% of fund managers.
Most trust managers (53%) instead expect the FTSE 100 to saty within the same range as this year.
Fund managers are generally more pessimistic about equities. While 91% of IFAs expect markets to rise next year, this opinion is shared by a more modest 66% of investment trust managers.
Of those managers who thought markets would not rise next year, 55% said they expected to see increased market volatility and 27% expected markets to stay fairly flat.
The majority of those IFAs who do not expect markets to rise anticipate flat markets.
The two groups do agree on which geographical areas to watch next year however.
Both are looking to the Far East ex-Japan and emerging markets to outperform, with 41% of fund managers expecting the Far East to be the best performer followed by 25% for emerging markets.
Some 9% expect the UK to be the best performing country next year, 6% tip the US and a further 6% Europe.
Emerging markets is the most heavily backed sector among IFAs with 27% anticipating them being the top performer.