Institutions in continental Europe appear to have more favorable attitudes toward equities than their counterparts in the U.K. and U.S., according to a survey of European investors published by JPMorgan Asset Management.
“One reason is because U.K. (and U.S.) institutions currently have much higher allocations to equity compared to their peers” in continental Europe, said Peter Ball, managing director and head of U.K. institutional business at JPMorgan AM.
The survey found institutions in continental Europe average an equity weighting of 29% of total assets compared with 56% among U.K. investors. According to results from an earlier survey conducted by JPMorgan AM, U.S. institutions had a target equity allocation of 54% of the total portfolio.
Among European institutional investors, 61% said they won't dramatically change their target allocations to equity, and 23% said they planned to increase the equity portfolios, according to the current survey, which included 194 institutional respondents in 14 countries. Most investors in Europe expect global equity markets to revert to their historic average rate of returns of between 5% and 10% per year.
In comparison, U.K. executives said they are planning to reduce equity allocations by four percentage points to 52%. And 21% of the U.S. respondents in the earlier survey are planning to reduce equities. As a result, fixed income and alternative investments are likely to rise.