ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

post-aberdeen-event-slides-oct-2013

Then we have the Fund Manager Sentiment Survey, in which we ask 25 global fund management groups whether they think a series of asset classes will be up more than 5%, down more than 5% or in the middle in 12 month’s time. The green, orange and red bars show the sentiment in aggregate. +100…

Below are the three charts I showed you at the event. If you are interested in getting full access to this website and all the underlying research, if you’d like to receive the magazine, or if you want to be considered as a delegate for future educational investor events, then please send an email to our head of research Ilyes Bdioui (he was there on the day so you might have met him).

His email is ilyes.bdioui@lastwordmedia.com – or call him

on +44 20 7382 4470.

You can also email me, Dylan Emery, if you have any questions or comments. My email is dylan.emery@lastwordmedia.com

On with the research…

Firstly, here is the investor sentiment graph. It shows the attitude towards European equities of professional investors in various countries. As you can see, Belgian, Italian and Spanish investors became less positive about European equities from mid-2012 to mid-2013; Sweden is relatively bearish on the asset class; and the run-away bulls are the Spanish.

Then we have the Fund Manager Sentiment Survey, in which we ask 25 global fund management groups whether they think a series of asset classes will be up more than 5%, down more than 5% or in the middle in 12 month’s time.

The green, orange and red bars show the sentiment in aggregate. +100 means everyone is positive; -100 means everyone thinks there will be a 5%+ drop. The purple line chart overlayed shows the movement of the index on the month we polled the managers.

As you can see, there is high correlation between how well the index does in a month and the fund managers’ aggregate outlook. So it seems that they are swayed by current performance.

If you we now take the second chart and compare how their sentiment was to the performance of the index 12 months later – which is when they were supposed to be making their predictions. At this point you can see quite a few instances where the index does the opposite of the sentiment – so when they are optimistic that might be a selling signal in 12 months’ time!

What it shows overall is that a) it’s hard to predict index movements; b) consensus estimates tend to be wrong. So either don’t try to guess index movements; or go for contrarians.

I hope you found that interesting and hope to see you at future events!

Dylan Emery, Editor, Expert Investor Europe.

MORE ARTICLES ON

MORE IN

  • Can M&A and buybacks breathe life into UK market?

    Can M&A and buybacks breathe life into UK market?

    Both buybacks and M&A should help realise value in UK shares, boosting prices and giving investors another reason to consider the UK stockmarket Not only does M&A activity appear to be picking up, with a high-profile bid for UK electronics retailer Currys, but the scale of company buybacks continues to accelerate. If it goes well,…

  • Capital Group launches multi-thematic Article 8 funds

    Capital Group launches multi-thematic Article 8 funds

    Capital Group has launched a set of multi-thematic sustainable funds that are available for investors in Europe, writes Christian Mayes. The Capital Group Sustainable Global Opportunities fund (LUX) will invest in global equities, while the Capital Group Sustainable Global Corporate Bond fund (LUX) will target fixed income exposure. The launch also includes a multi-asset offering…

  • Bond funds pull in €29.7bn in January – LSEG

    Bond funds pull in €29.7bn in January – LSEG

    Bond products were the best-selling asset class in January, according to LSEG Lipper’s European Fund Flow report, writes Christian Mayes. The asset class pulled in a net €29.7bn in the month, while Money Market USD grouping was the best-selling Lipper Classification after receiving €11.2bn inflows. Providers of mutual funds pulled in €22.5bn, while passives saw net…

  • Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    Quarter of Article 8 funds at risk of greenwashing – MainStreet Partners

    A quarter of all Article 8 funds could be accused of greenwashing based on their sustainability framework and practices, according to MainStreet Partners, writes Christian Mayes The 24% of funds classified as a greenwashing risk by the 2024 ESG Barometer report marks a four percentage point increase from the 20% flagged at the end of…

  • EU green rules could stymie decarbonisation projects – ExxonMobil

    EU green rules could stymie decarbonisation projects – ExxonMobil

    The European Union’s climate regulations may lead to it halting its investments in Europe, ExxonMobil has warned. Speaking to the Financial Times, Karen McKee, president of the product solutions division, said the oil and gas giant had struggled to begin decarbonisation projects in Europe due to the regulatory burden. The result, she added, was that…

  • ICE flags need for Europe to double green investment

    ICE flags need for Europe to double green investment

    Investments to modernise energy and transport must double by the end of the decade to reach 2030 climate targets, the EU has been warned. According to the Institute for Climate Economics (ICE), which has released the European Climate Investment Deficit report, the bloc lacks what it calls a “consistent tool” to ensure monitoring of the…