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Where adviser firms believe asset class performance will sit in 2019

12 December 2018

Adviser firms expect US, UK and emerging market equities to be the top three performing asset classes next year, according to research by Aegon.

As investors brace themselves for a range of factors, including trade tension and growth concerns as well as a question mark over whether the bull run is coming to an end, the retirement specialist surveyed over 200 advisers on their views on the best and worst performing assets over the next 12 months.

Despite UK equity funds experiencing record outflows since the Referendum in June 2016, 14% of advisers put this asset in their top three best performing asset classes. The same trend was seen across US equities (22%), while emerging market equities (15%) also ranked highly.

In contrast, cash was not expected to perform well, with 24% of advisers listing is as their worst performing asset over the next year. Gilts came in second place (19%), while corporate bonds (8%) were predicted to be the third worst performing asset.

However, over one fifth (22%) of advisers said they were unsure of the asset class they would predict to generate the best returns over the next 12 months. The research also showed that views on best performing asset classes depended on the average client portfolio value. For clients with an average pot of £200,000 or more, Asia Pacific assets were predicted to be the fourth highest performing asset at 11% compared to just 4% among advisers with clients of £100,000 or less.

Nick Dixon, investment director, Aegon, said: “In this highly volatile investment landscape, advisers are right to question whether the longest bull market in history could be coming to an end. When it comes to investment decisions, advisers and investors are having to face a number of concerns head on. This includes the impact of geopolitical stress on emerging markets, equity valuations, and potential impact of Brexit on UK equities.

“However, our research shows that advisers remain level-headed in the face of a very fickle market. Advisers are right to remain focused on long-term returns, diversification and avoid reacting to fast moving market conditions.”

Survey results (click on image to enlarge)

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