The latest Aon Consulting Investment Forecasts survey for the period ending December 31 shows that managers have revised their forecasts for cash, New Zealand fixed interest and International fixed interest upwards.
The survey asks eight fund managers what they estimate the annual rate of return before tax and expenses will be for each of the asset classes.
It is a major turnaround from the previous quarter's survey where managers predicted stronger returns in all bar one sector.
|
Asset class |
Expected average return over next 12 months |
Change from last quarter |
Expected five year returns |
|
Cash |
6.2 |
+0.7 |
6.0 |
|
Fixed interest |
6.8 |
+0.5 |
6.8 |
|
Property |
8.6 |
-0.4 |
8.8 |
|
Equities |
13.4 |
-0.6 |
12.3 |
|
Intl fixed interest |
5.9 |
+0.6 |
6.4 |
|
Intl equities |
6.1 |
-1.6 |
11.9 |
|
Inflation rate |
2.3 |
+0.3 |
1.9 |
Source: Aon Consulting
The biggest single increase was in New Zealand cash where managers have raised their expectations from 5.5 per cent to 6.2 per cent. Managers expect international fixed interest returns to rise 0.6 per cent to 5.9 per cent and New Zealand fixed interest to rise 0.5 per cent to 6.8 per cent.
On the downside international equities take the biggest hit falling 1.6 per cent to 6.1 per cent.
While the short term view is a bag of mixed news, the five year return outlook is more positive. There the managers have raised their return expectations for all six asset classes. While the increases are small (ranging from 0.1 per cent to 0.5 per cent) they are at least positive.
The eight managers surveyed are AMP Asset Management, ANZ Funds Management, Armstrong Jones, AXA, BNZ Financial Services, BT Funds Management, Guardian Trust Funds Management and WestpacTrust Investment Management.
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