Model portfolio providers have been largely shunning UK equities, but independent financial advisers still like them, separate pieces of research show.
Fund managers offering model portfolios to UK investors were “risk-off” in the first quarter of 2017 and moved out of equities, Natixis Global Asset Management (NGAM) found. NGAM analysed 97 risk-rated model portfolios over the quarter.
Meanwhile, in separate research, Aegon UK found that one in three financial advisers (33%) believed that UK equities will generate the best return for their clients over a three to five year investment period. Aegon UK surveyed 102 financial advisers in March.
Aegon did say there was a notable split among adviser opinions: 16% viewed UK equities as the most overvalued asset class, which was perhaps a symptom of Brexit uncertainty, the firm said.
But the disagreement between model portfolios and advisers didn’t end at UK equities.
NGAM also noted a surprising move into fixed income by model portfolios, which was a more volatile market in Q1, and said secular changes in rates led by America could be a reason.
Meanwhile, Aegon found that just 1% of advisers believed corporate bonds and gilts would provide the best returns, and said fixed income had “fallen from favour”.
©2017 funds europe
