Investor confidence in global markets rising


By Caitlin Scarr

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The number of Australians investing in overseas markets rose by 9 per cent in October compared to September, according to the Certitude Global Investing Intentions Index (CGIII).

The index, which tracks net demand for global investments, rose from 160 points in September to 175 points in October.

In addition, 41 per cent of investors surveyed intended to invest offshore within the next three months.

This was the highest percentage recorded for intended investments since the study was launched in May, again indicating growth in global market optimism, the index found.

High net worth individuals, those with over $1 million in investable assets, were the most optimistic investors, but the gap between high net worth investors and other individuals has narrowed.

This indicated a generally improved sentiment towards global markets by Australian investors, according to the CGIII.

A large number of investors are favouring international funds that cover multiple regions.

Thirty-four per cent of investors plan to use these funds in the next 12 months, outstripping Asian market interest, which dropped to 21 per cent.

The United States/North America remains the region of most interest, with 40 per cent of investors planning to invest there, despite a decline in October.

Certitude Global Investments chief executive Craig Mowll said the October findings showed a slight change in investor interest.

“It’s interesting to note that US/North America, Asia and international funds covering multiple regions have remained the top three choices since the CGIII started,” Mowll said.

“What is surprising this month is that international funds covering multiple regions actually overtook Asia as the preferred option.”

There were a number of possible reasons for this variation, he said.

“Economic data out of Asia hasn’t been as positive as investors would have liked, and with US markets still uneasy about the future, investors are looking to spread their risk through multiple regions. Investing in international funds gives them access to markets and regions that they may not feel comfortable about investing in directly,” he said.

International investors have indicated a preference for an actively managed portfolio (44 per cent) over the direct purchase of overseas shares (37 per cent).

This preference had changed almost monthly, Mowll said.

“We find that this can be reflective of investors’ concern with markets or the regions of interest. With appetite at an all-time high for international funds covering multiple regions, investors may be looking for guidance from investment experts,” he said.

Equities remain the most popular asset class with 89 per cent of investors opting for them, followed by property at just over 10 per cent.

The CGIII is produced by Investment Trends and collated the views of 716 respondents in October.

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