Sophisticated investors are growing more interested in global investments and more serious about actually allocating assets overseas.
The Certitude Global Investing Intentions Index rose to 175 points in August (from 169), indicating that more Australian investors are planning to increase their exposure to overseas assets.
And they’re looking to do it soon. Last month, 36% of investors said they intend to make their next overseas investment within the next three months. This is a reflection of investors’ view that global markets are likely to rise over the next year, with 74% of those surveyed expecting a rise compared to only 15% who anticipate global markets will fall.
“The research confirms that Australian investors, who have long held a very strong domestic bias, recognise the opportunities for growth, income and diversification that come from investing globally,” said Craig Mowll, CEO of Certitude Global Investments.
“We believe the intentions of these sophisticated investors can be seen as a leading indicator for where and when other Australians will move to specific markets and asset classes around the globe. And with Australia representing just 2% of the investment opportunities out there, investors stand to reap the benefits from diversifying offshore.”
The US/North America has held a firm lead in popularity with investors over this quarter. Just over half of investors interested in gaining overseas exposure said they would like to invest in this region in the next 12 months. Western Europe was a choice for 17% of investors looking to invest globally (up 5%), and China’s appeal grew 3% since July, to 15%.
While equities have consistently held the most interest to investors looking overseas, fixed income begun to see an uptick in popularity, as 7% of investors said it was a global asset class they planned to use, up from 4% last month.
“Investment grade credit is the most popular category of global fixed income among those surveyed. However, both emerging market debt and sovereign debt have more than doubled in popularity since May. No investors preferred sovereign debt in May and this is now the choice of 20% of investors who plan to use fixed income. Similarly, emerging market debt has gone from 9% in July to 24% in August, which is especially interesting considering that as an overall region, the research shows a decline in interest in emerging markets as a whole.”