Hedge fund managers are optimistic that the S&P 500 index will continue its upward trend in 2015, a survey released Tuesday by hedge fund consultant Aksia showed.
Of the 187 hedge fund managers polled in November and December, Aksia reported that 71% expect the S&P 500 to return up to 10% in 2015, while an additional 23% of respondents said the index will be down or flat in a range of zero to -10%. Only 3% of hedge fund executives think the index will return more than 10% for the year.
While exactly half of those surveyed expect the Nikkei 225 index to return up to 10%, an additional 23% of respondents think the index return will be between 10% and 20% this year. But nearly one-quarter of those surveyed (24%) expect the index to lose as much as 10%, Aksia reported.
As for the MSCI Emerging Markets index, the prediction of 51% of respondents was for a return up to 10%; 15% expect returns between 10% and 20%; and 28% foresee returns as low as -10%.
Regarding geopolitical and economic events in 2015, Aksia’s survey respondents expressed the following consensus opinions:
- 71% think the U.S. Federal Reserve will raise interest rates by 0.5 percentage points;
- 71% do not expect the default rate for U.S. corporate bonds to exceed 5%;
- 56% forecast 10-year U.S. Treasury Bond yields will exceed 3%;
- 76% believe there is a real possibility that the European Central Bank will buy government bonds;
- 67% think it is unlikely that any countries will leave the eurozone economic and monetary unit;
- 59% do not believe inflation in Japan will rise by 2% or more; and
- 54% are not optimistic that China will maintain its pace of yuan appreciation and economic growth.
Aksia’s universe of managers collectively managed more than $1 trillion in hedge fund strategies, according to Aksia’s summary of survey results.