Advisers split on UK equity prospects
- Aegon research reveals that most advisers expect emerging market equities to be the best-performing asset class over the next 12 months, with cash expected to be the worst performer.
- Advisers are favouring risk assets again, following market volatility at the end of the year, with emerging market equities (27%), UK equities (20%) and US equities (18%) the three asset classes most expected to offer the best performance.
- Advisers are split on UK equities, with 20% expecting the asset class to generate the best returns for clients and 14% saying they think it will perform the worst.
- Over three quarters (78%) predict that political uncertainty will have the biggest impact on investor confidence over the next year.
Research by Aegon, carried out among 250 financial advisers, highlights renewed optimism among advisers as they predict the asset classes they expect to generate the best and worst returns for clients over the next 12 months.
Advisers are turning their attention to risk assets with emerging market equities (27%), UK equities (20%) and US equities (18%) ranking in the top three places as the asset classes expected to generate the best returns for clients over the next year.
While cash may be viewed by some as a ‘safe haven’ during times of volatility, our research shows that the highest proportion of advisers expect cash (18%) to be the worst-performing asset class over the next year. Just 1% of advisers said that they expect cash will generate the best returns for clients over the next 12-months.
Advisers are, however, divided in their views on UK equities, with 14% expecting the asset class to perform the worst, while 20% expect it to perform the best over the next 12-months.
Nick Dixon, Investment Director at Aegon, said:
"Following months of significant and ongoing economic and political volatility, our research points to the fact that advisers are now feeling more confident, turning their attention to risk assets and putting the volatility of the end of 2018 behind them. While our research suggests that advisers remain concerned about political uncertainty, looking at UK equities specifically our view is that many stocks are now undervalued. We believe that the most potentially negative scenarios are already reflected in prices for UK equities, and that the prospects for this market are better than the market expects. It is unsurprising that advisers and investors have mixed views on the best investment strategy to adopt, but it would be wise to remain focused on diversification and long-term returns when building client investment portfolios.”
Research carried out by Opinium on behalf of Aegon amongst 250 UK IFAs in February 2019.
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Notes to Editors
- In the UK, Aegon offers retirement, workplace savings and protection solutions to more than three million customers and employs more than 3,000 staff. More information: aegon.co.uk
- As an international life insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty markets in the Americas, Europe and Asia. Aegon companies employ over 25,000 people and have millions of customers across the globe. Further information: aegon.com
Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 165548. An Aegon company.www.aegon.co.uk
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