Financial advisers are split on UK equity prospects over the next twelve months, but believe risky assets are back in favour, according to research by Netherlands-based Aegon.
Nearly 30% of the 250 advisers questioned predict that emerging market equities will be the “best performing asset class” in generating returns for clients over the period in question, Aegon said.
US equities came in at third with 18% of respondents saying it will generate the best returns, after UK equities (20%) where advisers were most divided. It will be the worst performing asset class according to 14% of those surveyed.
As advisers look toward risk assets in these markets, cash is “expected to be the worst performer” by the highest proportion of advisers (18%), despite being considered by “some as “a ‘safe haven’ during times of volatility”.
Only 1% of those involved in the research predict that cash will generate the best returns during the period in question.
Political uncertainty remains a key issue as well, with 78% believing it will have the most substantial impact on investor confidence throughout the same period.
“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,” said Aegon’s investment director Nick Dixon.
“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,” he said.
The research was carried out amongst 250 UK IFAs by Opinium on behalf of Aegon.
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