Global equities hit confidence high

Despite recent global events, Australian fund managers are favouring international shares over Australian equities for the first time in over two years, according to a survey by Russell Investments.

The quarterly Investment Manager Outlook survey found that factors in Libya, Japan, China and Europe have not stopped Australian managers from holding increased confidence in a strong global recovery.

Russell portfolio manager Scott Bennett said the outlook could be attributed to managers seeing signs of recovery in Europe, along with stronger growth in the United States.

“The strong Aussie dollar is making offshore assets appear cheap at current valuations and with all signs pointing to a recovery in developed international economies, managers are seeing increasing opportunities offshore,” Bennett said.

But while managers have not overseas factors dent their confidence towards international equities, they are mindful of possible factors that will impact on returns.

Topping the managers’ list of events to watch is the sustainability of China’s growth, with the risk of a slowdown being a significant point to watch for Australian investors.