Fund managers find increasing demand for income
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The volatile economic environment has led investors to become increasingly focused on income, according to a survey of fund managers by Aviva Investors.
The group’s multi-manager team found that the growing focus on returns applies to the majority of asset classes and particularly among real estate managers.
According to the survey, 83% of real estate managers believe clients are more focused on income compared with 71% of equity managers and and 67% of fixed income managers.
Nick Mansley, global director of multi-manager at Aviva Investors, says: “In an environment of low cash yields and continued uncertainty around economic growth it is not surprising that investors are more focused on income. We expect this to be a long lasting theme across several asset classes.”
He adds: “The fact that equity investors are seeing more of an increased focus on income and are more concerned about inflation than fixed income managers turns the world of investment on its head, and may reflect the broader uncertainty in markets at this point in time.” (article continues below)
The survey found equity managers are the most optimistic about return expectations, with 64% anticipating these to exceed 5% in 2012.
While equity managers cited the sovereign debt crisis as the greatest threat, the prospect of a lack of liquidity is a major concern among fixed income managers.
More than 70% of fixed income managers say that a lack of liquidity is the biggest risk currently facing corporate bonds, while 62% worry about the impact of a sovereign default or restructuring on sovereign bonds.
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