Industry Surveys
UK Investors Warming To Developed Market Equities - CFA
CFA UK has released its Valuations Index for Q1 2018 which looks at investors perceptions of the value equities, bonds and gold.
UK investor confidence in developed market equities is slowly
returning, after a high level of perceived overvaluation last
quarter, according to a recent CFA UK survey.
CFA UK’s Valuations Index measures 11,600 UK investment
professionals’ perceptions of the value of equities, bonds and
gold in Q1 2018.
Whilst the majority of investors polled still struggle to find
value in this asset class, around eight per cent fewer
respondents now consider developed market equities to be
overvalued, dropping from 73 per cent last quarter to 65 per
cent.
This is in spite of a three per cent rise in the value of
developed market equities since Q4 2017.
Some 73 per cent of UK investors currently believe emerging
market equities to be undervalued or fairly valued, increasing
from 69 per cent in Q4 2017.
Having steadily declined since Q2 2017, the proportion of
investors identifying government bond overvaluation has once
again risen, reaching 80 per cent this quarter.
As in Q4 2017, gold is the asset class in which investors have
most confidence, with almost half of those polled considering it
to offer fair value and an additional 24 per cent considering it
to be undervalued.
“Global financial markets are currently experiencing a period of
instability, as factors like the imposition of tariffs by the US,
potential interest rate rises and geopolitical uncertainties all
disrupt the normal state of play,” said Will Goodhart, chief
executive of CFA UK. “The results of our index show that
investors are feeling these pressures and looking for new
investment strategies. The vast majority of our respondents
consider bonds and developed market equities to be overvalued
and, out of the core five asset classes included in our survey,
now see gold as a more attractive option. Commonly seen as a safe
haven during uncertain times, gold may become increasingly
popular in the face of continued uncertainty about valuations and
global stability.”
