IFAs favour US equities in latest JPMAM poll

In a turn around from this time last year, America is now the preferred equity market for the majority of IFAs. Research conducted at the JPMorgan Asset Management (JPMAM) Investment Summit 2008 amongst over 150 of the UK's top investment advisers revealed that over half (51%) favour the US compared to Emerging markets (25%), Japan (18%) and Europe (just 6%). This is a far cry from the 2007 summit at which just 10% favoured the US and 61% opted for Emerging Markets.

Jasper Berens, Head of UK retail sales for JPMorgan Asset Management comments "There has been a huge change in attitude towards the prospects of the US. Last year it was clear that the downturn in America was having a knock on effect and dragging the rest of the world into economic crisis. However now it seems that, just as the US was the first to fall into recession, so too will it be the first to recover."

Whilst the short term growth and performance figures for US equities continue to make bleak reading, almost a third (29%) of IFAs polled believe that the US equity market has probably seen the bottom of this cycle. Another 40% feel it has probably not hit rock bottom yet, whilst almost a fifth (19%) believe that the market has definitely not seen the bottom of the cycle.

Berens continues "Whether this is the bottom of the cycle or not, IFAs are right to be looking to the US equity market. Bear markets typically bottom well before a recession ends and so, with valuations so low, there are currently some great buying opportunities. The might of US large caps might just be enough to offer UK investors some much needed rest bite and returns going into 2009."

Another result from the polls showed that over the next 6 months IFAs would be looking to increase their portfolio exposure to equities, with 39% opting for the asset class ahead of fixed income (38%), alternatives (14%) and cash, which took just 7% of the vote.

In the fixed income space, the survey also revealed that 60% of voters believed that Global High Yield Bonds would deliver the best returns in the near future, with Corporate Bonds taking 28% of the vote and cash receiving just 7% overall.