Equities will be the star asset class of 2015, both in developed and emerging markets, according to a new AsianInvestor survey.
But there appears to be no respite for the downward trend of commodity prices, with the bear market set to continue this year, respondents to the industry poll say.
In an online survey over the past month, readers were asked which asset class would perform best in 2015.
The results were clear, with 25.5% of readers tipping developed market equities; while 19.9% backed emerging-market stocks.
After major stock markets around the world enjoyed a generally fruitful 2014, and with fixed income facing rollover headwinds, perhaps this should come as no surprise.
The world’s two largest economies were the best performers among major developed and developing stock markets last year – China's Shanghai CSI300 index surged 52%, while the S&P500 increased 11.4%.
Commodities remain out of favour with our readers, with 25% expecting them to be the year's worst performers. Alongside them were developed market fixed income products, with 18.1% of the vote.
After surging throughout the 2000s, commodities have taken a knock in recent years, with the slowing Chinese economy hitting prices as the nation’s insatiable demand for raw materials dried up.
The collapse in the price of oil since last summer made it one of the worst performers of 2014, going from more than $100 a barrel a year ago to less than $50 last month. The survey results were as follows:
|Which of the following will provide the best and/or worst one-year performance in 2015?|
|Best one-year||Worst one-year|
|Developed market equities||83||25.5%||27||8.4%|
|Developed market fixed income||29||8.9%||58||18.1%|
|Emerging market equities||65||19.9%||36||11.3%|
|Emerging market fixed income||28||8.6%||49||15.3%|
|Private and illiquid assets||45||13.8%||36||11.3%|
When it came to the question of which asset class was likely to see the largest inflows from Asian institutional clients, equities again emerged on top. Developed market equities won but only by a narrow margin with 23.4% of votes, followed closely by emerging market / Asia equities with 22.2%.
Interestingly, private and illiquid investments scored strongly in third place with 15.2%, comfortably outscoring the most liquid traditional asset class of developed market fixed income at 10.1%.
Again commodities were among the least popular choices with just 6.3% of the vote, narrowly ahead of structured products with 5.7%.
Which asset class will see the largest new flows from Asian institutional clients
(asset owners such as sovereign wealth funds, pension funds, insurers etc)?
|Developed market equities||37||23.4%|
|Emerging market/Asia equities||35||22.2%|
|Private and illiquid investments||24||15.2%|
|Developed market fixed income||16||10.1%|
|Emerging market/Asia fixed income||16||10.1%|
As for what readers thought would be the most successful equity index this year, China was the favourite. The Shanghai Stock Exchange garnered 26.3% of the vote on the back of a vibrant 2014, which saw the market rise 45.9% to become the world’s best-performing stock market last year.
More of a surprise was the relatively poor response to the Bombay Stock Exchange – our readers voted it as fifth most likely to do well this year, with 9.9%. The BSE’s benchmark Sensex grew 29.8% last year, making it one of the world’s top performers. However, with India’s National Stock Exchange in at number 2 with 11.1%, there is clearly expectation of outperformance.
But combining the results for Greater China as a whole shows a different picture. Together Shanghai, Hong Kong (10.5%), Shenzhen (2.3%) and Taiwan (1.2%) get a vote of confidence.
Exchanges that were expected to perform poorly included Thailand after a year rocked by a coup and military dictatorship. Jakarta's stock exchange received a respectable 7%, although that factors in hopes surounding the election of reformist president Joko Widodo. Japan Exchange Group came in at number 4 with 10.5%.
|Among the region’s stock markets, which index is most likely to perform best in 2015?|
|Shanghai Stock Exchange||45||26.3%|
|National Stock Exchange (India)||19||11.1%|
|Hong Kong Exchanges||18||10.5%|
|Japan Exchange Group Tokyo||18||10.5%|
|Bombay Stock Exchange||17||9.9%|
|Jakarta Stock Exchange||12||7.0%|
|Philippines Stock Exchange||11||6.4%|
|Australian Stock Exchange||8||4.7%|
|Shenzhen Stock Exchange||4||2.3%|
|Stock Exchange of Thailand||2||1.2%|
|Taiwan Stock Exchange||2||1.2%|
AsianInvestor surveyed its broad readerbase, which includes asset owners, asset managers and service providers from across Asia Pacific. In all 173 regional respondents took part.