IFAs hold little confidence in the future buoyancy of American equities, with the UK and Asia perceived as more desirable markets over the long term.
According to an IFAonline straw poll, only 9% of advisers expect the US market to emerge strongest from the recent credit crunch.
Almost four in ten (39%) advisers believe the UK will be the best performing global market, followed by Asia on 34%.
Revealingly, the results also showed 8% of IFAs feel no global market is attractive, again perhaps influenced by the global credit crunch.
Martin Bamford, joint managing director of Informed Choice, says investors were losing interest in American equities before the credit collapse emerged.
“There was nervousness in the US long before the crisis, which I would mostly say surrounds the currency exchange rate,” he says.
“Outside of America as well, there are a lot of people who just don’t trust an economy run by President George Bush.”
Bamford also says the argument the US is better equipped than the UK to deal with the recent crunch because of the size of its market is wide of the mark.
“The US has a high level of exposure to the credit crisis and there are still many issues and a lot of negative sentiment,” he says.
On the flipside, Bamford says investors feel confident in the long-term UK economy, aided by no currency risk, and the Far East.
“As for Asia, sure it is perceived as more risky, but we are aware of the long term growth potential.”
Association of Investment Companies spokesperson Jemma Jackson says the IFAonline poll figures are “no surprise”.
“We have done similar research, polling fund managers and IFAs yearly, and the results closely reflects ours,” she says.
“We have found the fund managers and IFAs do seem to have more confidence in Asia and the UK.”
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The Aviva Investors Multi-asset Funds (MAF) target equity risk rather than absolute volatility. Thomas Wells, Multi-asset Fund Manager, explains that while absolute volatility varies significantly over time, the inherent risk of investing in equities remains relatively constant.
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