Advisers most optimistic on emerging markets for 2010
- Virgin Money Investors Intentions Index shows switch to Emerging Markets from UK Shares
Advisers are most optimistic on Emerging Markets for 2010 with UK shares in second place after a rollercoaster year for the FTSE-100, according to the latest results from the Virgin Money Investor Intentions Index.
Around 32% of IFAs are most optimistic about Emerging Markets despite the Dubai World debt shock in comparison with 30% who feel most optimistic about UK Shares, according to Virgin Money’s research.
And the year-on-year figures show an even bigger turnaround – at the end of 2008 just 17% of advisers were optimistic about Emerging Markets compared with 50% who were optimistic about UK shares for the year ahead. Optimism about Far East Shares has also risen considerably from 12% a year ago to 22% now.
Virgin Money’s authoritative Investor Intentions Index tracks the confidence of independent financial advisers across the country in 10 different investment sectors as well as where they advised their clients to invest their money over the preceding quarter.
IFAs are still advising clients to invest in UK Shares – the research shows 83% will advise clients to invest in the UK over the next three months compared with Bonds at 77% the next most popular sector ahead of Emerging Markets and European Shares at 75%.
Optimism about investing in Cash has fallen heavily from 19% a year ago to just 6% now. And just 58% of IFAs will be advising clients to put money into Cash over the next three months.
The switch away from UK Shares follows a turbulent year for the FTSE-100 which started in January at 4561.8 before dropping as low as 3512.1 in March and then rebounding to more than 5200 by the beginning of December.
Virgin Money spokesman Grant Bather said: “Optimism about Emerging Markets reflects the growing belief that economic recovery is underway worldwide while the UK has yet to officially emerge from recession. The MSCI Emerging Markets Index has doubled since March 2nd although it has suffered in the wake of the Dubai crisis.
“The bigger picture however is that confidence is returning to shares after a tough year and that advisers and their clients are now willing to take risks in return for long-term gain. Advisers and their clients are no longer fixated on safety at all costs and at a potential cost to themselves.”
| SECTOR
| PERCENTAGE FEELING MOST OPTIMISTIC
ABOUT SECTOR | CHANGE ON LAST YEAR |
|---|---|---|
| UK Shares | 30% | -20% |
| Emerging Markets | 32% | +15% |
| Far East | 22% | +10% |
| European Shares | 18% | -9% |
| Bonds | 12% | -12% |
| Property | 10% | +8% |
| Commodities | 8% | +4% |
| Gold | 2% | -2% |
| Green Investments | 4% | +3% |
| Cash | 6% | -13% |
In the three months to November the most popular sector for IFAs was UK shares – 81% advised clients to put money into the UK stock market ahead of 72% who chose Bonds. European Shares were selected by 67% of advisers with Emerging Markets chosen by 64% of IFAs.
Cash was chosen by just 49% of IFAs while Gold was the choice of just 38% of advisers. Green Investments were more popular than Gold chosen by 40% of IFAs.
The Virgin Money Investor Intentions Index tracks 10 sectors in total. These are: UK Shares, European Shares, Green Investments, Cash, Commodities, Property, Bonds, Far East, Emerging Markets and Gold. The Index details advice over the last 3 months and investment intentions for the next quarter (tables).
-Ends-
* IFA interviews were conducted by George Street Research in November 2009. A total of 100 interviews were completed amongst a cross-section of advisers throughout Great Britain with a weighting towards those whose business is primarily with investment clients. Quotas were imposed on the total sample in respect of size of IFA firms, region and areas of specialisation.
For further information
Grant Bather at the Virgin Money Press Office
Tel: 0207 111 1012
Kevan Reilly/Chris Jarvis, Citigate Dewe Rogerson
Tel: 0207 638 9571
About Virgin Money:
- Virgin Money is Virgin’s financial services arm and was established in 1995.
- Virgin Money has more than 2 million customers and offers a wide range of financial products across lending (e.g. credit cards and personal loans), savings (e.g. deposits, investments and pensions) and protection (e.g. life assurance, household and car insurance) to the UK market.
Virgin Money Personal Financial Service Ltd is authorised and regulated by the Financial Services Authority (FSA). Registered office: Discovery House, Whiting Road, Norwich NR4 6EJ. Registered in England No. 3072766. Entered on the Financial Services Authority's register number 179271.