IFAP/AITC joint poll- Investment trust fund manager and IFA 2006 predictions
- Fund managers more bullish than IFAs about FTSE’s prospects in 2006
- IFAs expect Emerging markets to outperform Fund managers opt for
- Fund managers tip Financials as top performing sector - IFAs tip Smaller companies
- IFAs boosted by share price rally Fund managers by strong cash flows and M&A boom
The Association of Investment Trust Companies (AITC) and IFA Promotion (IFAP) have joined forces again this year to gauge investment predictions and views for 2006. The AITC spoke to 31 investment trust fund managers from 42 member investment trusts representing 13.4 billion of assets under management (a fifth of the industry) and IFAP received responses from 249 of its member IFAs. See page 3 for fund manager quotes.
Both IFAs and fund managers were optimistic about the markets’ prospects in 2006. The majority of IFAs expected markets to rise overall next year (92%) and investment trust fund managers were more optimistic than last year, with some 77% of fund managers agreeing. The greatest cause for optimism amongst investment trust fund managers was strong corporate cash flows (27%) and the M&A boom (19%) whereas IFAs were mostly boosted by the present strength of markets (22%) and low interest rates (16%).
The survey revealed some interesting differences of opinion between fund managers and IFAs. Fund managers were more optimistic than IFAs about the FTSE 100 in 2006 with more managers predicting that the FTSE would end 2006 above 6000. Most IFAs (27%) predicted that Emerging Markets would be the top geographical area next year whereas most fund managers (18%) opted for
However, there were parallels between the two groups. Most IFAs (50%) and fund managers (47%) expected the FTSE 100 to close between 5500-6000 at the close of 2006. Both groups also had the same concern about markets with most fund managers (29%) and IFAs (33%) highlighting a lack of consumer spending as one of the greatest threats. Fund managers also pinpointed rising interest rates as one of the biggest threats (17%), whilst IFAs were more concerned by terrorism (22%).
Where will the FTSE close in 2006?
Investment trust fund managers were more bullish about the FTSE 100 in 2006 with 27% of fund managers expecting the FTSE to end 2006 at over 6000 compared to 15% of IFAs. Also 10% of IFAs expected the FTSE to close below 4500 whereas only 3% of fund managers agreed. Investment trust fund managers and IFAs were mostly in agreement however, with 47% of fund managers and 50% of IFAs expecting the FTSE 100 to close between 5500-6000 at the close of 2006.
Where will the FTSE 100 close at end of 2006?
Under 3000 | 3000-3500 | 3500-4000 | 4000-4500 | 4500-5000 | 5000-5500 | 5500-6000 | Above 6000 | |
Fund Managers | 3% | - | - | - | 7% | 17% | 47% | 27% |
IFAs | 1% | 2% | 2% | 5% | 7% | 19% | 50% | 15% |
Where in the world?
The highest proportion (18%) of investment trust fund managers expect
(inc | (Ex | Emerging Markets | US | |||||
Fund Managers | 9% | 11% | 18% | 16% | 11% | 14% | 14% | 7% |
IFAs | 10% | 9% | 7% | 27% | 17% | 5% | 14% | 6% |
Which sectors?
Investment trust fund managers stuck to their guns this year, with most again expecting blue chips and financials to outperform next year. They were also very optimistic on the technology sector, with 17% of fund managers expecting technology to outperform next year compared to just 7% last year. IFAs also stuck to their guns, preferring smaller companies for the second year running (18%) and their second most popular choice was resources including oil (16%).
Blue Chips | Financial | Tech | Smaller Co’s | Resources (incl oil) | Media | Manufact-uring | Property | Private Equity | Utilities | |
Fund Managers | 17 | 21 | 17 | 4 | 9 | 9 | 6 |