The survey showed that nine out of 10 managers surveyed believed the Australian market is currently fairly valued or overvalued – reinforcing the need for investors to look offshore for returns.
Russell says that the research shows that after a strong run in the Australian equity market over the past year, compared to international markets, investment managers have become more sanguine about the domestic market’s future return prospects.
At present less than 10% of investment managers surveyed believe that the Australian market is undervalued at current valuations, while more than one third believe it is overvalued.
Russell chief investment officer Peter Gunning says that Australian small caps and listed property trusts will bear the brunt of shifting investor sentiment over the coming year.
“Sentiment has become most bearish at the small end of the market which has outperformed its large capitalization counterpart over the past three years.”
“The listed property sector which has similarly been a darling of investors over the last few years also appears to have lost much of its appeal., with more than two-thirds of managers now bearish on the sector.”
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