Two thirds (63%) of wealth managers are still bullish on equities as we reach the halfway mark in 2024, a sentiment survey from Asset Risk Consultants (ARC) has found.
This is despite the strong gains markets have already seen this year, particularly in the US where the main indices and several of the largest companies are at record highs.
ARC also found sentiment towards equities has improved markedly over the past year amid unusually high political uncertainty, with more than 70 countries going to the polls in 2024. Net positive sentiment towards equities has increased to 57% from -22%.
ARC spoke to 90 CIOs of wealth management firms to compile the survey. The 63% that expressed a positive view on equities comfortably topped the 13% recorded this time last year.
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The consultancy said the upswing in positive sentiment suggests investment managers are unfazed by the raft of elections and now have greater clarity on the direction of travel for interest rates and inflation. Many anticipate a ‘soft landing’ in the US rather than a recession, as earlier feared.
Grant Wilson, CIO at ARC, said: “Elections can drive market volatility and the UK’s fiscal outlook will be top of mind for investors given the ghost of the 2022 mini budget, the pledge from Labour to respect the fiscal rules and the lack of headroom against fiscal targets.
“With Labour prioritising higher taxes to finance welfare spending and fiscal consolidation, some analysts suggest that the new Government’s proposals could boost demand growth relative to current policy.
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“The near term the impact of a new government on the UK equity market is likely to be fairly limited as we are told that only 17% of MSCI UK revenues are actually generated in the UK,” he continued. “In the medium to long term, reforms could create a more favourable business environment and support sectors with a high domestic exposure.
“However, the longer-term outlook is more uncertain, with the US election likely to have a far greater impact on the global economy, which could influence bond yields and potentially lead to higher interest rates in 2025.”
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