Equity “Santa Rally” may be over, CFA UK says

An increasing number of investment professionals think developed market equities are overvalued, a survey has indicated.

Just over 70% of members of the awards body, CFA UK, who were surveyed said the asset class was overpriced – an increase of 30 percentage points of those with that view this time last year.

Yet a significant amount felt emerging market equities were undervalued. The percentage saying this was 40%, though views that the assets were overpriced were creeping upwards, reaching a quarter of the survey cohorts this year, from 19% last year.

Will Goodhart, chief executive of CFA UK, said: “The fact that more than 70% of respondents say that developed market equities are overvalued indicates that the so-called ‘Santa Rally’ might be running out of steam. With so much change occurring in 2016 and potentially 2017, it seems investors are concerned a lot of the positives may already be in the price. They could be reluctant to chase further gains.”

The valuations index also showed that views around government and corporate bonds being overvalued have risen steadily for the last four years and remain at record levels.

However, investors were split into groups of about a third on whether gold was over, under, or fairly valued.

©2017 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

Innovative US companies are providing some of the solutions to the climate crisis and transition to a more sustainable economy. We see potential opportunities in areas including renewable energy and…
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

IRELAND SPOTLIGHT

Visit our dedicated Ireland channel for all the latest news and analysis on the country's investment industry.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST