MANAGER SENTIMENT SURVEY
Ups and downs
Most sectors saw sentiment fall or plateau in March, although Japan climbed
into a positive position while US smaller companies has achieved its highest
score in over five years. And even though sterling continues to struggle against
the major currencies, managers at least saw better times ahead against the yen
Three of the five UK
sectors saw sentiment
tail away slightly in our
March survey, with UK
smaller companies
equity ending its sevenmonth
residency in the
positive end of the
UK
spectrum. It was also
only one of two sectors
– the other being UK government bonds – to
see its benchmark lose ground, with the FTSE
Small Cap Index losing 2.28%.
Although it is still languishing in negative
territory, UK government bonds managed to
recover eight points to sit at -32.
Positive
Neutral
Negative
Positive
Neutral
Negative
Positive
Neutral
Negative
100
50
0
-50
-100
Apr ’09
100
50
0
-50
-100
Apr ’09
100
50
0
-50
-100
Apr ’09
UK GOVERNMENT BONDS
-16
-32
Mar ’10
Emerging markets
32
16
0
Although it dropped ten points, BRIC equity is now the
only sector whose sentiment score remains above 50,
ensuring its grip on the Bull of the Month position
remains firm. It is often the IC in BRIC – India and
BRIC EQUITY
32
China – that grabs the
headlines, but what of
Brazil and Russia?
16 As Neal Underwood
observed in last month’s
0 edition of PA (pages
52-53), UK investors
-16 have a low understanding
of Brazil in particu-
-32 lar, while both it and
Mar ’10 Russia have a lot more
EMERGING MARKET EQUITY
32
to offer than simply
the fact that they
are huge commodity
16 providers.
It would be an inter-
0 esting exercise to know
how much they influ-
-16 ence the managers participating
in our survey
-32 in their feelings towards
Mar ’10 the sector in general.
Citi UK Govt Bond Idx (discrete) %
MSCI BRIC (discrete) %
MSCI Emg Markets (discrete) %
Positive
Neutral
Negative
100
50
0
-50
UK EQUITY
-100
-32
Apr ’09
Mar ’10
The big issue facing the UK sectors is, of,
course, the General Election. While managers
continue to give the thumbs up to UK equity,
it will be interesting to see the effect the election
outcome will have on their attitude to the
sector over the coming months.
Positive
Neutral
Negative
100
50
0
-50
-100
Apr ’09
UK CORPORATE BONDS
Global
In association with
-100
-32
Apr ’09
Mar ’10
The biggest concern is probably how investors
will react to the increasing likelihood of a
hung parliament. It will be fascinating to watch
the direction both sentiment and the benchmark
indices head in the months either side of
the election result.
International bonds have seen a slow erosion of manager support for
three months now. In March it dropped 12 points to four, the lowest score
since June 2008. While managers obviously feel UK corporate bonds will
be the fixed income place to be for the next 12 months, the index performance
tells a more mixed story. The Citi World Government Bond
benchmark has outperformed the Citi WBIG UK Corporate Citi Bond
Index over three, five
and ten years but the
situation is reversed
100
GLOBAL PROPERTY
32
over three months and
one year.
50
16
Global property
rebounded in March,
0
0
up 12 points to 33.
Global Property Securit-
-50
-16
ies added a robust -100
-32
8.36% as well.
Apr ’09
Mar ’10
36 PORTFOLIO ADVISER [www.portfolio-adviser.com] MAY 2010
32
16
0
-16
32
16
0
-16
-32
Mar ’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
Apr ’09
100
50
0
-50
-100
Apr ’09
UK SMALLER COS EQUITY
UK PROPERTY
INTERNATIONAL BONDS
32
16
0
-16
32
16
0
-16
-32
Mar ’10
32
16
0
-16
-32
Mar ’10
FTSE Small Cap (discrete) %
FE UK Property (discrete) %
Citi Wld Govt Bond Idx (discrete) %
Glbl Property Secs (discrete) %
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.