Advisers double-dip fears abated, says Barings

Investment professionals are becoming increasingly optimistic about the economic outlook as concerns over a double dip recession begin to fade, says Barings.

Whereas 28% of investment professionals cited the risk of a double dip recession as a major global macroeconomic challenge towards the end of 2011, this proportion has fallen to 10%.

Barings’ quarterly survey also found that just 28% of participants are concerned about a second banking crisis, down from 61% in the previous survey.

While the US and the UK are still coming across as relatively safe havens, investors are still overwhelmingly concerned about the sovereign debt crisis, making emerging market equities the clear choice for many.

Rod Aldridge, head of UK retail distribution at Barings, says: “In light of the Greek bailout agreement, it is clear that sentiment towards the economic outlook is becoming more positive.

“However investment professionals are still cautious and continue to look to the diversification of assets as an increasingly popular strategy in order to de-risk clients’ portfolios.”

He adds: “Emerging markets, many of which have escaped the effects of the ongoing credit crisis, remain relatively unscathed and continue to show strong potential for growth and therefore remain a favoured investment option.”

More than half, 57%, are still unfavourable toward European equities while 94% remain favourable to emerging markets. UK equities remain favourable among 85% of investors, second to the US which generated an 89% positive reaction.

Despite this sense of confidence returning, clients are still being heavily advised to diversify their holdings with 73% of advisers urging clients to select multi-asset vehicles.