Fear of debt crisis haunts professionals

Worried_man_410Eurozone debt and the prospect of a second banking crisis are the top concerns for investment professionals.

The Barings Investment Barometer survey, which explores intermediaries’ attitudes towards the current economic outlook and their views of major asset classes, found that over three-quarters (78%) cite the Eurozone crisis as the biggest global macroeconomic challenge facing investors. At the beginning of the year only 51% saw the debt crisis as a major challenge.

The prospect of a second banking crisis has also become a prominent cause of concern for investment professionals with two in five (41%) citing this as one of the biggest global challenges of the next six months, a significant increase from 15% who cited it as a concern in the last survey.  The ability of over-leveraged economies to reduce their debt is also of greater concern, with 74% citing it as a major challenge to investment growth compared with 65% in the previous quarter.

The survey also found that nine out of ten professionals were looking to reallocate cash investments to combat inflation, and that fixed income was returning to favour.

Also, emerging markets were the most popular asset class for those advising on asset allocation.

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