Robeco, hosts the battle of the Titans for the future of China

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Robeco, anfitrión del combate de Titanes por el futuro de China
Wikimedia CommonsFoto: Kishore Mahbubani y Jim Walker. Robeco, hosts the battle of the Titans for the future of China

China’s short-term prospects are bleak, with a recession ahead, Jim Walker told the Robeco World Investment Forum. But its longer-term rise, along with the wider Asian region, is unstoppable, countered Kishore Mahbubani.

China’s economy is faltering. First-quarter GDP growth disappointed, with a 7.7% year-on-year increase. That was lower than both the 7.9% reported for the final quarter of last year and the consensus expectation of 8%. Moreover, the government is warning that the country has entered an era of lower growth, as it presses on with rebalancing the economy from a focus on investment and exporting to domestic consumption.

What are the implications of this shift, both in the short term and in the long term? Where is the country heading in the next few years? And is China still on course to overtake the US as the world’s largest economy?

For Jim Walker, managing director at Asianomics, the independent economic research company, China is at a critical juncture. And the outlook is not good. “We think there’s a recession ahead for China,” he said. “Not just lower growth, but a recession.”

China saved the world but killed itself

Why? “China killed itself when it saved the world in 2009,” said Walker. That is because of the extraordinary credit expansion since the start of the financial crisis. In 2009, the Chinese injected new credit into the economy equivalent to 43% of Chinese GDP, or 16% of US GDP. They followed up by repeating the act in 2010, 2011 and 2012, when new credit was equivalent to 41%, 37% and 37% of Chinese GDP respectively.

At the same time, the growth rate is slowing. Walker argued that rather than the official 7.8% for GDP growth last year, digging into the supporting data suggests that 5% is a more realistic figure.

New credit increased further in Q1 2013

“This credit expansion cannot continue, can it?,” he asked. “Well, actually, in the first quarter of this year, it accelerated.”

The inevitable result of these floods of money is overcapacity across the economy. “When countries have overcapacity, they don’t make money in their corporate sector,” said Walker. And that is the case in China, he said, as the earnings reported by companies there “don’t actually exist”, thanks to accounting sleights of hand. Tellingly, operating cash flow as a percent of net profit was only 54% in China in 2011, against a typical figure in most counties of 100-120%.

“To improve that cash flow position, to improve the companies’ balance sheets, they’ve got to cut capital expenditure. And banks have got to stop lending to them,” he said. “When that happens, you get recession.”

New political leadership has its hands full

A further issue is China’s new leadership. Walker told the forum that his Beijing contacts are positive about the new leadership’s efforts in fighting corruption and moving the economy away from the state sector.

But he’s not so sure. For sure, they have been dealt a bad hand. “Corruption, corruption, corruption. China is ripe, rotten with corruption,” he said. “There is a clampdown on corruption. But is it enough?”.

The answer is: probably not. “They’ll take China forward to feather their own nests and to make sure that their pockets are full,” he said. “They know how to accumulate money like nobody else on the planet.” Moreover, the acceleration of credit growth in the first quarter of this year suggests to Walker that “more of the same” can be expected from the new leadership.

Still, Walker’s picture of China isn’t 100% gloom. “The Chinese take such crises on the chin,” he commented in his interview “Recession in China will come as a surprise”, before they bounce back.

Mahbubani: a major historical aberration is ending

According to Kishore Mahbubani, Professor in Public Policy at the National University of Singapore, China’s bounce-back is long overdue. Mahbubani’s stock in trade is not so much the rise of Asia but its return.

He argues that until 1820, the world’s two largest economies were China and India. And after two centuries of Western domination, the world is returning to the historical norm of the previous two millennia. In this longer-term perspective, the supremacy of the UK and the US should be viewed as “a major historical aberration”. “All aberrations come to a natural end,” he said.

For Mahbubani, “the big question” about Asia’s return to the center stage of world history “is why? And why now?”

Asians have learnt best practices from the West

His answer is that Asians have absorbed and understood Western best practices in many areas, from free-market economics to innovation in science and technology. “If you want to find the greatest psychological conviction about free market economics, it used to be in the West. Now, it resides in Asia,” he said. They have also instilled in many cases a belief in meritocracy and the rule of law, and developed what he referred to as a “culture of pragmatism”.

How meritocratic is China?

But just how meritocratic is China? The author of The Great Convergence: Asia, the West and the Logic of One World rejected the notion that nepotism offers an easy entry route into the country’s political elite, pointing to the intense struggles behind the scenes in the Chinese communist party.

“These guys fight their way up,” he said. And that, he said, has a positive effect, allowing only the cream to rise to the top: “The quality of the minds of the people at the top in China is probably among the best you’ll ever find.” That is quite a different interpretation of the Chinese leadership to Jim Walker’s.

Still, Mahbubani accepts there are risks for China, both internally and externally. At home, inequality is on the rise and the exploding middle classes are demanding more government accountability, creating some political uncertainty.

No avoiding Sino/US geopolitical competition

Abroad, there are geopolitical tensions within the Asian region, such as the squabble with Japan in the East China Sea over the Senkaku/Diaoyu islands, and with the US, whose number-one position in the global economy China is challenging. “Rising geopolitical competition between China and the US is inevitable,” said Mahbubani.

But he believes the Chinese government is too pragmatic to allow such tensions to have a long-term impact on economic relations. Moreover, he feels that the interdependence of the world economy, through trade and financial links, make the likelihood of war extremely unlikely. “There will be geopolitical rivalries. There will be no geopolitical wars,” he argued. “The US & China will actually work together in economic co-operation.”

Will China become the world’s #1 economy

So where does that leave China’s progress to economic top dog? For Mahbubani, it is just a matter of time—and not that much time either. He said that by 2017, China’s share of global GDP will have risen to 18.2% in purchasing power parity (PPP) terms, when the US’s share will have dropped to 17.6%.

Walker was more skeptical. “China will become the biggest economy in the world as long as it keeps printing numbers that don’t mean anything,” he noted.

 

After the Crisis High Net Worth Investors Expect More From Their Advisors

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In the wake of the financial crisis, advisors to either institutional investors or high net worth investors need a drastically different set of skills and personal qualities to succeed, according to a white paper just released by BNY Mellon, the global leader in investment management and investment services.

“The Conscientious AdvisorSM: A New Paradigm in Wealth Management Sales” co-written by Tracy Nickl, Executive Director of Sales for BNY Mellon Wealth Management and Jennie Hollmann, PhD. of Caliper Management, asserts that today’s successful advisor must be more methodical and conscientious when dealing with clients and prospects. Furthermore, the paper contends, firms should establish a conscientious platform that helps their advisors succeed and prepares them for career advancement. The result, say Nickl and co-author Hollmann, whose firm is a workplace productivity and talent recruitment and development consultancy, is not only having happier clients but also more satisfied and more successful employees.

“It’s clear to us that since 2008 high net worth investors have become more skeptical about our financial system. What these investors want and need in a trusted advisor has changed dramatically. Our paper offers some insights into what Conscientious Advisors—and their companies—must do to better serve these clients,” said Nickl.

In addition to retaining and winning new business, companies that adopt the Conscientious Advisor/Conscientious Platform model stand to benefit in other ways.  “BNY Mellon adopted the Conscientious Advisor model in early 2010 and by the end of 2012 our sales force turnover dropped by 50 percent and the average new business revenue for a sales director had jumped by nearly 20 percent,” said Nickl.

Nickl contends that a Conscientious Advisor shows:

  • Commitment: Cares about clients and focuses on empathy, listening, over-preparing for every client interaction
  • Collaboration: As part of a team over-prepares for each meeting and offers holistic solutions, not product
  • Credibility: Asks the right questions, exhibits professionalism and transparency that reinforce one’s personal brand
  • Consistency: Follows repeatable processes, executes flawlessly, always follows up and always follows through

Just as importantly, Nickl adds, firms must do their part to support their advisors with a conscientious platform that promotes and rewards conscientiousness through:

  • A defined, repeatable sales process
  • A “think tank” model for developing solutions for clients
  • Organizational commitment to advisor success
  • Technology and organizational infrastructure

 

Wealth Management Companies Have Adopted Social Media as a Preferred Advertisement Channel

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Wealth Management Companies Have Adopted Social Media as a Preferred Advertisement Channel
Foto: Frydolin . Las redes sociales cobran fuerza entre las empresas de wealth management

The advent of social media presents a valuable opportunity for wealth management companies. As internet access and smartphone adoption increase, a growing number of internet users are becoming involved with social networking. Companies are developing their processes to be able to respond to web-oriented consumers. Banks and other wealth management institutions are engaging customers with social media, which is shaping up as a strong channel for promoting new schemes, identifying customer needs and receiving feedback online, as a Trimetric Report.

Companies have started to use social media sites as a marketing tool to communicate with external customers and to promote their products and services. These companies use YouTube and Flickr to post videos relating to products and services, key developments, events and conferences. Online video is an important part of the modern internet landscape, reaching a large number of people in an engaging context that is attractive to marketers and advertisers. Companies are marketing their services by posting presentations and brochures on open sharing platforms such as Facebook and Slideshare. Many have launched their own social networking forums and blogs to connect with customers. The cost-effectiveness and large reach make social media one of most preferred advertisement channels among wealth management companies.

Due to the growth and popularity of online channels, wealth management companies are now expected to deliver a personalized online customer experience through social media tools. The sector today is investing in platforms such as sites, blogs and video sharing to create awareness and to expand their reach.

The ultimate goal of adopting social marketing is to attract new customers and generate increased loyalty across existing customers, which will help companies to increase their revenues and profitability in the long run. Social Media interactions provide companies with a platform to reach out to customers and deal with issues in real time, therefore increasing both the quality of their service and their levels of consumer trust.

Global social media sites continue to dominate the social media landscape; however, local companies are beginning to show signs of resistance and are now competing for a share of the market. Social media has been one of the preferred digital advertisement channels among wealth management companies. Wealth management companies are increasing their investments in analytical tools to understand the consumer behavior.

Social media marketing is gaining in popularity as the companies are using it to inform consumers about their product campaigns and other product launches. The increasing prevalence of the internet and widespread adoption of Smartphones have fuelled social media expansion. Companies have started to use social media sites as a marketing tool to communicate with external customers as well as to promote their products and services.

Facebook, Twitter and LinkedIn have managed to establish themselves across the globe but local social networks continue to play a huge role when it comes to brand awareness and customer outreach. Wealth management firms have still not fully exploited the benefits pertaining to their presence on social networks and are actively seeking more innovative ways to gain followers. Wealth managers, financial advisors and family offices have still not made significant progress in social media due to limited awareness, concern for data security, as well as the legal and reputational risks associated with the media.

Spain: Investors can get used to anything

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España: los inversores pueden llegar a acostumbrarse a todo
Wikimedia CommonsPhoto: European Popular Party (Flickr: EPP Congress Marseille 7592) . Spain: Investors can get used to anything

Maxime Alimi, economist at Axa IM has published a report about Spain’s fiscal sustainability. Spanish fiscal sustainability remains in question. In the first part of his analysis, Maxime Alimi shows that Spanish real GDP growth in the coming ten years is likely to remain low, at about 1.3% on average. This is due to shrinking working-age population, a very gradual decline in the unemployment rate and modest improvements in productivity growth.

Investors seem to have now learned to live in Europe’s new normal: banking crises, political uncertainty and growth disappointments

“This is one lesson we have learned from three years (and counting) of the European sovereign crisis. While the first episodes of the crisis led to unprecedented stress in euro fixed income markets, investors seem to have now learned to live in Europe’s new normal: banking crises, political uncertainty and growth disappointments.

Still, this apparent resilience should not lead bond investors to lose perspective. At the end of the day, what matters is getting your money back, which implies picking solvent issuers. And while markets have calmed down, the fiscal position of most euro-area sovereigns is deteriorating, with budget deficits still large (although shrinking) and debt stocks increasing. Worse, the market’s silence has led to more complacency vis-à-vis deficits: the European Commission has recently approved a new fiscal trajectory for Portugal in 2013- 2015 and the European Semester should reveal similar leniency for Spain, France and the Netherlands, to name but three.

Spain has been at the center of investor concern and remains one large European issuer whose fiscal sustainability is rightly being called into question. This analysis attempts to shed some light on whether Spain will be able to stabilize and eventually lower its debt to GDP ratio over the next ten years.

Fiscal sustainability is a highly complex issue to address due to the large number of moving parts: projecting debt to GDP over time implies assumptions about real GDP growth, prices, primary deficits and interest rates paid. This being the case, the first part of our work will focus on just one element: real GDP growth…you can read the full report following this link.

Former president of GenSpring’s Miami office, new partner at WE Family Offices

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La antigua responsable de la oficina de Miami de GenSpring, nueva socia de WE Family Offices
Foto cedidaFoto: Julie Neitzle . Former president of GenSpring’s Miami office, new partner at WE Family Offices

Julie Neitzel has joined W.E. Family Offices as a partner, the project led by Santiago Ulloa and Maria Elena Lagomasino.

According to the Miami Herald, in this position, she will focus on building and managing family wealth enterprise relationships.

Before joining the company, she served in several leadership roles at GenSpring Family Offices for 10 years.

Henderson launches High Yield Opportunities Fund

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International investment manager Henderson Global Investors has launched the Henderson High Yield Opportunities Fund (HYOAX, HYOCX, HYOIX), a mutual fund that seeks to obtain total return and current income by investing in high-yield bonds and select investment grade fixed-income securities.

The Fund will be managed by Henderson’s six-member US credit team, headed up by Kevin Loome. The team joined Henderson in February this year from Delaware Investments and this is the first fund to be developed for them. The team utilizes a fundamental credit research process and leverages a bottom-up security selection approach – emphasizing cash flow projections, total return potential and liquidity analysis – to create a diversified and focused portfolio of between 50 and 100 holdings.

While the Fund primarily invests in high-yield corporate bonds, up to 20 percent of the portfolio’s assets may be allocated to fixed- income securities rated investment grade. Those securities include US and non-US government securities, collateralized bond obligations and corporate bonds, with much as 25 percent of the Fund’s net assets invested in securities from foreign issuers.

“The combination of our investment approach, underpinned by fundamental and proprietary credit research, and our global team’s close collaboration allow us to construct a focused ‘best ideas’ portfolio of high-yield bonds and select investment-grade securities from issuers all over the world,” said Kevin Loome, Henderson’s Head of US Credit and the Fund’s Portfolio Manager. “At a time when interest rates are hovering at historic lows, Henderson is offering investors access to the most attractive high-yield securities from across the globe.”

Chuck Thompson, Director of US Retail, added, “This fund is a key addition to our fixed income fund line-up as it completes the credit spectrum and reinforces our dedication to provide our clients with products that are both global and truly differentiated. Henderson is now recognized as a global leader in both equities and fixed-income with an experienced credit team managing over $27bn in assets1”.

Advisors and investors can access more information about the Fund through the Henderson Global Funds interactive iPad app, which was launched earlier this year. It offers a deeper understanding of Henderson’s global products and investment expertise. The free app is part of Henderson’s broader strategy to connect with advisors and investors via YouTube, Twitter and Facebook, as well as the Henderson website.

Big Data: The Corporate Search for Digital Treasure

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The ING Global Opportunities strategy uses a thematic approach to identify attractive investment opportunities. The sub-theme ‘Big Data’ helps identify companies that will benefit from a growing global requirement to collect, organise, mine and analyse large and diverse datasets.

Data growth is exploding. Before 2003 mankind created 5 exabytes of data, now we generate 5 exabytes of data every 3 days. Decoding the human genome took 10 years before 2003 but now it can be achieved in one week. Wal-Mart handles more than 1 million customer transactions every hour with the equivalent amount of data as 167 times the books in America’s Library of Congress. Large amounts of data offer opportunities but putting it all together requires new IT solutions. Enter Big Data!

What is Big Data?

The benefits to a business of using its own data are frequently higher when addressing the variety of the data it collects as opposed to the volume. Unfortunately traditional data warehouses are not well-equipped to do this and certainly cannot handle modern unstructured data such as videos, images, texts and music. Fortunately, there is a new and on-going form of innovation within the IT sector that is permitting many organizations to deploy large amounts of complex data at a much faster rate and sophistication than previously was possible. This is what we call Big Data.

In practice Big Data has two main definitions. It usually refers to a special type of data: high volume, high speed and complex; or to a set of new technologies used to collect, organise, mine and analyse large and diverse datasets.

What is driving Big Data?

The real commercial treasure is considered to be the ability to analyse the large volumes of social content and related behaviour. Of course, in order to do this you would need to have the right kind of software and also a certain level of speed to ensure timely application of any business opportunities.

The benefits of combining large volumes of complex data with analytics and velocity are still yet to be discovered in some industries while in others they are already being implemented. In retail, for example, predictive big data analytics based on shopping habits have been around for a while.

Sub-theme within the Global Opportunities strategy

Leveraging Big Data will be a necessity for running the companies of the future. Adopting Big Data solutions could be like opening a treasure chest for many businesses. The ING Global Opportunities team seeks to identify the winners from this trend. Big Data is a sub-theme within the strategy’s ‘Digital Revolution’ investment theme, which is one of the seven main pillars of the team’s thematic approach to global investing.

To view the complete story, click the attached document above.

Howard-Sloan Names Global Practice Director of Wealth Management

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Howard-Sloan Names Global Practice Director of Wealth Management
Wikimedia CommonsFoto: Pgecaj . Howard-Sloan nombra a Alan Goldstein director de Wealth Management

Howard-Sloan, an executive search firm specializing in the placement of top tier executives for legal and financial practices, is pleased to announce the addition of Alan Goldstein. Mr. Goldstein will serve as the firm’s Global Practice Director of Wealth Management.

“It gives us great pleasure to welcome Alan to the Howard-Sloan team,” said Howard-Sloan CEO, Mitchell Berger. “Alan enters our firm with a multitude of knowledge about the wealth management sector and his extensive work with clients throughout the U.S., Latin America, Europe, Middle East and Asia will help Howard-Sloan expand its verticals both domestically and internationally.”

Goldstein comes to Howard-Sloan with over 20 years of experience in the industry. Through his role he will be concentrating on sectors including, but not limited to, private bankers and relationship managers, financial advisors, and private client investment management.

“I am delighted to join an organization as highly regarded as Howard-Sloan,” Goldstein stated. “The firm’s tremendous track record and success in legal and compliance recruitment dating back to 1957 speaks for itself. I look forward to contributing to the company’s wealth management division by pursuing additional verticals that will serve as a natural progression for Howard-Sloan’s well-established current practices, which include legal, compliance, accounting and IT.”

Goldstein reiterated that firms in the wealth management, family offices, asset management and hedge fund spaces should not hesitate reaching out to him regarding recruiting and hiring executive talent.

For over fifty years, Howard-Sloan Professional Search has specialized in the placement of legal, compliance executives, accountants and IT professionals worldwide. At Howard-Sloan, we are committed to providing the highest level of service to our clients and candidates. We conduct our business honestly, with the greatest sense of integrity

BNY Mellon Awarded Best ETF Service Provider In The Americas for Seventh Year in Row

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BNY Mellon Awarded Best ETF Service Provider In The Americas for Seventh Year in Row
By Sandip Dey . BNY Mellon, galardonado como el "Mejor Proveedor de Servicios de ETFs" de las Américas

BNY Mellon, the global leader in investment management and investment services, has been named as the 2012 “Best Service Provider – The Americas” at the ninth annual Global ETF Awards, which is sponsored by exchangetradefunds.com.  This is the seventh consecutive year that BNY Mellon has been honored as the top service provider to ETFs (exchanged-traded funds).

“We continue to enhance our industry-leading technology to support an ever-increasing array of ETF categories, including actively managed ETFs, commodity-linked ETFs and global ETFs,” said Joseph F. Keenan, managing director for BNY Mellon Asset Servicing and head of its global ETF services business.  “We view this award as evidence of our passion for delivering the highest quality customer service to product sponsors.”

Since its inception in 1997, Exchangetradefunds.com has been providing information on global ETF, ETC and ETN products on its website. Information on the site consists of product descriptions, products listed on international exchanges, industry info and events, interviews from industry leaders and news. It is also the host of the ETF Global Awards®  Dinner and Workshop. Its purpose is to recognize those who have contributed to the development of the ETF industry world-wide and welcomes industry participants from the international community to discuss their respective markets.

Mexican Investors Show Growing Optimism for Stocks, But Stick to More Conservative Strategies in 2013

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Los inversionistas mexicanos, con estrategias conservadoras y optimistas a largo plazo
Wikimedia CommonsAmerican Psycho. Mexican Investors Show Growing Optimism for Stocks, But Stick to More Conservative Strategies in 2013

Virtually all Mexican investors (95%) are optimistic about meeting their long-term investment goals, yet stock ownership is low and investment return expectations are high, according to the 2013 Franklin Templeton Global Investor Sentiment Survey. The survey polled 9,518 investors in 19 countries across Asia Pacific, the Americas and Europe on their current attitudes towards investing and their expectations for 2013 and the decade ahead.

Two thirds of Mexican investors think they will be able to meet their long-term investment goals without stocks, and Mexico has the lowest level of stock ownership (16%) of all 19 markets surveyed. By comparison, Hong Kong investors reported the highest level of stock ownership at 87% and US respondents reported 64%. Mexican investors predict a 10.8% market return in 2013 and a 14.9% average annual return on their investments over the next 10 years, the survey showed. In addition, more Mexican investor say they will be adopting a more conservative investment strategy (59%) this year than will be adopting a more aggressive one (38%).

“Given the research on expected long-term investment returns for different asset classes, there appears to be a clear disconnect between Mexican investors’ high expectations for returns and their lack of equity exposure,” said Hugo Petricioli, Franklin Templeton’s country head for Mexico and Central America.  “Portfolio diversification, including stock ownership, has historically proven essential to long-term investment returns, so clearly some investor education is needed.”

Global Investing, Benefits of Working with a Financial Professional

Like investors in most countries, Mexican investors have a home country investment bias. Mexican investors currently allocate nearly two thirds of their investments to Mexico, although they expect this percentage to decline slightly over the next 10 years as a larger percentage is allocated to developed markets. However, Mexican investors show concern about investing about their own country, with nearly half of those surveyed citing lack of knowledge as the main barrier, followed by the impact of exchange rates on their investment returns and regulatory restrictions.

Globally, those who work with a financial professional are more geographically diversified with their investments, had a more accurate view of past stock market performance and were more likely to identify themselves as being optimistic about reaching their financial goals (82%) than those who do not (76%).

Global Survey Results

While over 60% of global investors believe their country’s stock market will be up in 2013, risk continues to be a concern. In addition, two-thirds (66%) of investors now expect the best equity and fixed income opportunities will be found outside their home market this year (2013), reflecting growing optimism for global investing.

Overwhelmingly, investors around the globe have higher expectations for 2013 stock market performance, particularly in emerging markets where 66% expect their local stock market will improve (versus 58% in developed markets). However, despite this optimism, 57% of those surveyed plan to pursue a more conservative investment strategy this year, with younger investors (aged 25 to 34) leading the charge toward “safer” havens.

“In spite of investors’ positive outlook, it appears that avoiding loss, rather than achieving higher returns, is still their top priority,” said Greg Johnson, president and chief executive of Franklin Templeton Investments. “Clearly the market volatility over the past five years has reinforced a preference among investors for capital retention over investment gains.  As seen in recent years, this risk avoidance has led many investors to remain on the sidelines, missing opportunities. 

Wylie Tollette, director of Performance Analysis and Investment Risk for Franklin Templeton Investments added, “Many investors need to rethink risk and focus on the long term. Risk avoidance and risk management are two different things.  Trying to avoid short- term risk and volatility entirely may expose investors to other kinds of risks, such as inflation and the impact of rising interest rates.  These longer-term risks can negatively impact their ability to meet their financial goals.”

Contributing to investor risk aversion, more than half (51%) of investors globally incorrectly believe their domestic stock market was flat or down last year, when in reality, every market surveyed experienced an increase except Spain—and the MSCI World Index was up nearly 17%.

Investors See Best Opportunities Abroad

Despite reporting an overall tendency toward more conservative investing, investors recognize the opportunities of investing abroad. 

Reflecting growing optimism for global investing, two-thirds (66%) of investors now expect the best equity and fixed income opportunities will be found outside their home market this year (2013).

Considering performance of equities by geographic region, the highest portion of investors (28%) believes that Asia will provide the best equity return opportunity in 2013.  Asia was also selected, with the portion increasing slightly to 33%, when investors considered equity returns over a 10-year period.

While investors are not quite ready to send the majority of their assets overseas in 2013, they do plan to invest nearly 40% of their assets in foreign markets over the next 10 years, split evenly between developed and emerging markets.

Only in Australia and the United States do the majority of investors see the best equity and fixed income opportunities at home rather than abroad, as they plan to keep about three-quarters (78% in Australia and 74% in the United States) of their assets at home over the next 10 years.
 

Retirement is Top Investment Goal

Retirement is the top investment priority globally, with about a third (31%) of investors selecting it as their top investment goal in 2013. The selection of retirement was highest in the United States and Canada (54%), while lowest among investors in Latin America (19% in Mexico) and parts of Asia Pacific (29%). The top goal in those two regions is saving to purchase a new home (37% in Mexico and 31% in Asia Pacific). At 12%, Europe had the highest number of investors who indicated that saving for emergencies was their top goal.

Younger Investors Most Conservative, Global-Minded

Over two-thirds of younger investors (aged 25 to 34) do not see stocks as essential to meeting their long-term investment goals, the same figure for all Mexican investors. Compared to the other age groups surveyed, younger investors are also least likely to expect stocks to outperform other asset classes and more likely to be conservative in 2013.

That said, younger investors have more of their assets currently invested abroad, at an average of 37%, and show a greater willingness to invest abroad going forward.

Stocks, Precious Metals Lead Asset Class Expectations

Globally, stocks and precious metals were each selected by 21% of investors as the asset classes expected to perform best in 2013. However, those residing in developed markets generally have a more favorable outlook for equities, with Australia, Canada, Hong Kong, Japan, Singapore and the United States expecting stocks to be the top performing asset class this year.

As investors look further into the future, they expect real estate to outperform all other asset classes over a 10-year period, with the largest portion of investors (22%) seeing the greatest investment return in that asset class. Stocks and precious metals, each selected by 19% of investors, were not far behind.  

In Mexico, the expected top-performing asset classes in 2013 and over the next decade are:

                                             

2013 Expectations

Top-Performing Asset Class

10-Year Expectations

Top-Performing Asset Class

Precious Metals (61%)

Precious Metals (57%)

Real Estate (56%)

Real Estate (54%)

Non-Metal Commodities (39%)

Non-Metal Commodities (43%)

By comparison, Mexican investors ranked stocks fourth, after the asset classes noted above, for 2013 and 10-year expected returns