Some 69% said Mr Bush would win while 31% said John Kerry would succeed in his bid to be president. Speaking from a professional point of view a slight majority would prefer that Mr Kerry won. Despite this preference the outcome of the election is not expected to have any major impact on the American stockmarket.
Some 23% said it would negative for equities if Mr Kerry were to win but that could simply be because a Bush win is already priced into the stockmarket. Once the uncertainty of the election is removed the biggest impact on the global economy will be the price of oil. Some 57% cited oil prices as the biggest uncertainty affecting the market while 16% named the development of China and 15% said dollar weakness.
Generally managers said the price of oil would range from $40-$60 in 12 months’ time. About 40% said it would be cheaper, ranging from $25-$40 a barrel.
More fund managers were willing to take a stance on investment style this month. Almost a third said value shares would outperform growth over the next year while a quarter preferred growth shares. Some 63% said large firms would outperform their smaller counterparts. Only 8% backed small companies to outperform while 29% were neutral.
Global stockmarkets
Overall managers’ outlook on the performance of global equities improved in October from the previous month. While 6% said the MSCI World Index would fall over the coming year 22% expected returns of more than 10%. Some 57% expected a range of 5-10%.
Three-quarters of the managers surveyed said the dollar would be the worst performing currency over the coming year with sterling in a distant second with 17%. The euro and the yen were expected to be the strongest over the next year with 59% and 31%, respectively.
In terms of stockmarket sector performance the telecommunication and energy sectors were the fund groups’ top choices over the coming year while the hardware (technology) sector was expected to perform the worst.
Overall fund groups were expecting to see fewer fund launches over the coming year. Some 82% were themselves planning to launch new funds in the next 12 months, down from 96% in September. Also this month only 58% of managers said more funds would be launched than would be closed in Europe – nine percentage points fewer than in the last survey.
Morningstar’s European offices conducted the survey from October 18th-25th. Some 52 fund groups from 14 countries participated. On average they each managed €58billion (£40 billion) and offered 93 retail funds.
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