Fundies predict a turnaround in Aussie share market
Australian investment managers expect a sustainable turnaround in the local share market by the end of 2013, though potential political and policy "shocks" are keeping sentiment fragile.
This is according to Russell Investments' Investment Manager Outlook (IMO) survey, which collected the opinions of around 40 Australian fund managers.
Almost 80 per cent of survey participants believe a turnaround in the Australian share market is likely to occur by the end of 2013, with many believing it will happen by next July.
Both Australian and US fund managers believe a resolution to the eurozone debt crisis will contribute the most to a potential turnaround in equity markets.
Strong Chinese growth and a weaker Australian dollar were also listed as most likely to positively impact the local market.
"The results from both the Australian and US IMOs show that while managers are more confident of a turnaround on fundamental or valuation grounds, the potential for further political and policy shocks in Europe and the US is keeping investor sentiment quite fragile near term," said Russell director of client investment strategies Scott Fletcher.
Despite potential "shocks", fund managers have started to drop defensive assets, with recent interest rate cuts resulting in 69 per cent of managers growing bearish on cash.
"It's been a bumpy year to date with the Australian share market experiencing its fair share of volatility," Fletcher said.
"However we remain firmly of the belief that the path to superior long-term outcomes for investors will be via dynamically managed portfolios that are well diversified across (and within) multiple assets and strategies, to take advantage of market opportunities as they present themselves."
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