Seventy percent of institutional money managers surveyed by Northern Trust Global Advisors believe inflation will increase over the next six months, and 62% believe market volatility will increase over the same time period.
Also, 26% of the managers on NTGA's manager-of-managers platform increased their exposure to commodities in the first quarter.
“Global events during the first quarter of 2011 have given our managers a lot to digest in a very short amount of time,” Chris Vella, NTGA global director of research, said in a news release. “With renewed unrest in the Middle East, it makes sense that managers have become increasingly concerned about the impact that a spike in oil prices will have on economic growth. Likewise, as general concerns around inflationary pressures persist, we would expect some of our managers to increase their exposure to commodities as a means to hedging out some of that risk.”
The survey also revealed:
• 58% believe the S&P 500 is undervalued;
• 66% believe Japanese equities are undervalued;
• 36% were risk averse;
• 43% believe emerging markets are undervalued; and
• technology, energy, industrials, emerging markets and health care were believed to be the top five most attractive markets, respectively.
The survey of 88 managers was conducted in mid-March. Mr. Vella could not be reached by press time for further comment.