Northern Trust survey: Money managers expect less downside risk

Institutional money managers anticipate less of a downside risk on U.S. economic growth over the next six months, driven in part by a new confidence in a housing market rebound, according to a third-quarter survey of managers in the Northern Trust Multi-Manager Investments platform.

Sixty-nine percent of managers predicted U.S. housing prices would increase over the next six months, up from 33% in the second quarter. The second quarter's percentage had been the highest since the third quarter of 2008, making this renewed confidence particularly notable.

Eighty-seven percent said GDP growth would remain stable or accelerate over the next six months, up from 70% in the second quarter.

Managers also expressed confidence in the Federal Reserve's third round of quantitative easing, with 62% responding it would have a positive impact on the markets.

Surveyed managers also responded that the economy will be little affected by November's presidential election, with 52% of managers predicting a neutral impact, 28% predicting a positive impact and 19% predicting a negative impact. Sixty-two percent of respondents said their responses were not dependent on which party won the election.

The greatest risk to equities over the next six months continues to be the European debt crisis, according to managers. More managers in the third quarter also believed market volatility would increase over the next month, up to 69% from 65% the previous quarter.

Northern Trust surveyed 100 managers in mid-September.