Some 62% of attendees think the ECB’s newly unveiled bond-buying programme will mainly benefit equities, while less than a quarter think bond markets will be the main beneficiary. Finally, only 8% think the real economy stand to profit most from the programme.
European equity volatility
As a consequence, European equities are back in favour. In September, appetite for the asset class had dropped to an all-time low with just 16% of Belgium’s fund selectors planning to increase exposure. As the ECB turned a corner agreeing to switch on the money press, fund selector sentiment followed suit. A clear majority now say they want to buy more European equities, while almost none are pessimistic.
Almost two thirds of delegates supported the ECB’s decision to turn on the money press. However, the fact that only 8% expect money printing to mainly benefit the real economy suggests they don’t expect much of an impact on that front. Macroeconomic sentiment remains on a much lower level than last summer, and fund selectors expressed a strong preference for value rather than growth stocks.
Question marks
Fund managers who attended the event were largely supportive of the ECB’s actions as well, though they too have their doubts they would kickstart economic growth (which strictly is not the intention of ‘Q€’).
Adrian Hull (pictured), a global high yield bond manager at Kames Capital, considers it unlikely that 
QE will work as well in the EU as it did in the US and the UK. “The crux of the problem is that [the ECB’s QE] makes people buy expensive assets in the expectation that they will become even more expensive,” he said. “Instead you want the ECB to buy cheap assets which can become more expensive, which happened in the US where yields were higher when QE was introduced.”
Click here to see a full breakdown of the event voting data.
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