Diversification becomes key factor in asset allocation
Diversification has become one of key factors in asset allocation and replaced growth as the primary driver, according to a Schroders survey into Australian brokers and their asset allocation views.
The survey also found Australian Securities Exchange (ASX)-listed stocks were dominant, while direct equity and hybrids were the most popular ASX vehicles.
Furthermore, there was a clear move towards listed investment companies (LICs) at the expense of direct shares and active exchange traded funds (ETFs).
At the same time, asset allocation decisions picked up at the margin, with 22 per cent changing asset allocation in the preceding six months, up from 14 per cent.
Twice as many respondents thought increased returns were more likely than decreased returns over the next three years.
By comparison, the survey carried out six months ago found that the top three objectives for brokers were generating income, maximising returns including franking credits and capital protection and two of these fell down the list since March, the company said.
In March, the brokers participating in the survey also said that ASX listings remained the dominant vehicle of choice and that on average they were allocating 80 per cent to growth assets such as Australian and global equity as well as Australian real estate investment trusts (A-REITs).
According to Schroders’ latest survey, this hasn’t changed and sentiment was still positive with limited concern for an equity market correction.
AUTHOR
Oksana Patron
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