MANAGER SENTIMENT SURVEY
Hot property
The bad days are well and truly behind UK and global property. Not so long ago
managers had completely turned their collective back on the sectors; now they
are among the more loved. Meanwhile, Europe and Japan equity continue to lag
behind the other equity sectors, seemingly unable to ignite much enthusiasm
It was only six months
ago that UK property
was wallowing at the
bottom of our manager
sentiment survey,
firmly rooted in the
Bear of the Month
position. Yet the start
UK
of 2010 tells a completely
different story –
for the first time in exactly three years, the
sector has been given the thumbs up by managers,
with a positive score of 35, a rise of ten
points. It is now in a stronger position than
global property (see below).
UK equity and UK smaller companies equity
Positive
Neutral
Negative
Positive
Neutral
Negative
Positive
Neutral
Negative
100
50
0
-50
-100
Feb ’09
100
50
0
-50
-100
Feb ’09
100
50
0
-50
-100
Feb ’09
UK GOVERNMENT BONDS
-16
-32
Jan ’10
Emerging markets
32
16
0
BRIC equity enjoyed its strongest ever score since the
sector was first introduced into the sentiment survey in
June 2006, with a jump of five points to 81, providing
a hefty ten-point gap between it and its nearest rival,
BRIC EQUITY
32
emerging market
equity. It would take
nothing less than an
16 economic earthquake
to make managers any-
0 thing less than positive
on the sector.
-16 One of the aspects
of BRIC that makes it
-32 an exciting play for
Jan ’10 equity investors is the
EMERGING MARKET EQUITY
32
ever increasing amount
of trade taking place
between the four coun-
16 tries, with Russia and
Brazil able to provide
0 China and India with
the raw commodities
-16 that continue to power
their industrial output
-32 and provide power to
Jan ’10 the larger populations.
Citi UK Govt Bond Idx (discrete) %
MSCI BRIC (discrete) %
MSCI Emg Markets (discrete) %
Positive
Neutral
Negative
100
50
0
-50
UK EQUITY
-100
-32
Feb ’09
Jan ’10
were also back up in January after falling
slightly in December.
UK corporate bonds continue to be the
strongest of the all the UK-focused sectors,
despite a fall of three points to 57. Their government
counterpart, however, is by far the
Positive
Neutral
Negative
100
50
0
-50
-100
Jan ’09
UK CORPORATE BONDS
Global
In association with
-100
-32
Feb ’09
Jan ’10
weakest of the sectors across the entire survey
and is the only one that has returned a negative
score. It further entrenched its six-month occupation
of the Bear of the Month position –
which it took over from the now positive UK
property – with a slight fall of two points.
Manager indecision has continued with regards to international bonds
as they waver between being positive in their outlook or neutral. A look
at the graphs for other sectors shows that there is generally some sort
of consistent trend in sentiment, but not so with international bonds.
The latest fall of seven points could possibly be attributed to growing
uncertainty now that many countries are bringing quantitative easing to
an end, along with the recent jitters about the parlous state of the debt
problems of countries
such as Spain, Ireland,
Greece and Portugal.
100
GLOBAL PROPERTY
32
Sentiment on global
property plateaued in
50
16
January after eight
months of almost con-
0
0
tinuous growth. The
benchmark Global Pro-
-50
-16
perty Securities mean- -100
-32
while climbed 4.88%.
Feb ’09
Jan ’10
40 PORTFOLIO ADVISER [www.portfolio-adviser.com] MARCH 2010
32
16
0
-16
32
16
0
-16
-32
Dec ’09
FTSE All-Share (discrete) %
Citi UK Corp Bond Idx (discrete) %
PA Manager Sentiment Survey
Comparing the 12-month forward
outlook of 26 global fund groups
with current discrete monthly
index returns
Positive
Neutral
Negative
Positive
Neutral
Negative
Positive
Neutral
Negative
Positive
Neutral
Negative
100
50
0
-50
100
50
0
-50
-100
Feb ’09
100
50
0
-50
-100
Feb ’09
UK SMALLER COS EQUITY
UK PROPERTY
INTERNATIONAL BONDS
32
16
0
-16
32
16
0
-16
-32
Jan ’10
32
16
0
-16
-32
Jan ’10
FTSE Small Cap (discrete) %
FE UK Property (discrete) %
Citi Wld Govt Bond Idx (discrete) %
Glbl Property Secs (discrete) %
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