Search for Growth Study Spotlights Investor Views on Wide Range of Global Risks and Scenarios and Their Impact on Portfolios and Businesses
NEW YORK, April 24, 2013 — Nearly three-quarters of investors expect global economic expansion in 2013, an increase of 15% compared to 2012, according to the 2013 Search for Growth survey and report, sponsored by BNY Mellon and conducted by the Economist Intelligence Unit (EIU).
While generally bullish on a global expansion this year, many investors are expecting a strong US recovery — led by housing, manufacturing and energy. Others respondents are less sure, viewing the US as "the best of a bad bunch" of developed countries saddled with unsustainable debt, weakening infrastructure and growing income disparities. In fact, a staggering 65% of investors agree with the following statement: "Rising income disparities pose a threat to global capitalism".
Investors are also concerned about economic slowdown or overheating in emerging markets. BRIC (Brazil, Russia, India and China) economies are disappointing investors -- especially Brazil and India, which appear to have fallen out of favor with investors this year. Southeast Asia eased ahead of Brazil for the first time in the three year study, gaining the third slot in investors' preference
Key findings of the report include:
- Investors are still bullish on China, yet they are increasingly looking to the US and a wider range of emerging markets to bolster returns. When investors were asked to select the three best regions for asset price growth, 46% chose the US, 42% chose China, 34% chose South-east Asia, 30% chose Brazil and 27% chose India.
- 57% of investors think that US manufacturing will be revived by cheaper input costs (namely energy and labor). The overwhelming majority think this scenario will have a positive impact on portfolios or businesses.
- For the first time since the study launched in 2011, the US was picked by investors as the top country for asset price growth. China topped the list in 2011 and 2012.
- Globally, investors are most optimistic about quick returns in sectors such as oil and gas and agribusiness. But their bullishness on commodities has waned since 2011. Investors in 2013 are diversifying portfolios away from commodities and into value-added sectors such as technology and services.
- Investors expect the highest returns from equities this year. Meanwhile, with sovereign debt burdens still rising across much of the OECD, government bonds have been called into question. The survey shows that 53% of investors expect stocks to be the strongest performing asset class over the next 12 months.
The Search for Growth research examines the prospects for economic and market growth from the perspective of institutional investors and corporate executives. Based on a global survey of 730 respondents and a series of in-depth interviews with leading investors and experts, the report explores the potential for risk scenarios and for growth across a wide range of sectors, regions and asset classes.
The research will be presented tomorrow at the Bellwether Europe event in London. BNY Mellon is the Founding Sponsor of the Bellwether Series, a global program that includes five major conferences in the UK and Asia in 2013.
The Search for Growth: Opportunities and risks for institutional investors in 2013 is available at http://www.bnymellon.com/foresight/searchforgrowth.html and http://digitalresearch.eiu.com/searchforgrowth/.
The Economist Intelligence Unit (EIU) is the world's leading resource for economic and business research, forecasting and analysis. It provides accurate and impartial intelligence for companies, government agencies, financial institutions and academic organizations around the globe, inspiring business leaders to act with confidence since 1946. EIU products include its flagship Country Reports service, providing political and economic analysis for 195 countries, and a portfolio of subscription-based data and forecasting services. The company also undertakes bespoke research and analysis projects on individual markets and business sectors. More information is available at www.eiu.com (http://www.eiu.com/) or follow us on www.twitter.com/theeiu.
The EIU is headquartered in London, UK, with offices in more than 40 cities and a network of some 650 country experts and analysts worldwide. It operates independently as the business-to-business arm of The Economist Group, the leading source of analysis on international business and world affairs.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 36 countries and more than 100 markets. As of March 31, 2013, BNY Mellon had $26.3 trillion in assets under custody and/or administration, and $1.4 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on http://www.bnymellon.com/, or follow us on Twitter @BNYMellon.