Retail investors could hit wrong target

Retail investors piling into bond funds run the risk of missing out on a stockmarket upswing.

Morningstar.co.uk Editors 4 April, 2002 | 1:38PM
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Some 63% of UK-based fund management groups surveyed expect bond funds to attract the most money in the next 12 months according to the European Fund Trends survey conducted by Morningstar in March. Yet all the British respondents and 92% of European ones said equity [share] funds will perform best in the next year.

The equity fund asset class is also the most likely to dominate new fund launches in the next 12 months according to three quarters of UK participants.

Fund management groups across Europe are the least optimistic about the UK market’s performance over the next year with only 4% thinking it will be the best performin

g market. From their perspective Asia excluding Japan has the highest chances of outperfomance with 43% ranking it top. Japan has the lowest chances with 42% placing it last.

Technology, media and telecoms (TMT) was expected to be the best performing sector over the next 12 months by 44%, followed by financial services with 30%. Some 55% said the property sector would be the worst performer.

The survey, conducted between March 11th-21st, was based on responses from 59 fund management groups across Europe.

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