Investment professionals across the globe are optimistic that no country will exit the Eurozone this year and that a fiscal union will be established within the next 10 years, according to a survey of 188 fund managers conducted by Aviva Investors multi-manager team.
The findings come as the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) recently discussed Greece’s loan agreement to negotiate its economic adjustment programme for the next three years.
Aviva Investors surveyed managers on their views regarding the Eurozone in 2012 and beyond. While 41 percent of the fund managers surveyed expect some countries to exit the Eurozone within the next 10 years, only a quarter or 23 percent believe this will happen this year. The remaining 36 percent either don’t agree, believe there will be joiners as well as leavers, or simply don’t know.
In addition, over half of those surveyed (52 percent) are optimistic about the future of the Eurozone and expect a fiscal union to be established within the next 10 years. However, 41 percent don’t think the ECB or politicians will take sufficient action to restore confidence in the Eurozone before the end of this year.
Nick Mansley, global director of multi manager at Aviva Investors, commented on the findings: “This is our first formal survey of external fund managers covering all major asset classes across the globe. Broadly speaking, there is no consensus among them about what might happen with the Euro. While we continue to assess the ability of our fund managers to cope with the ramifications of a Euro break-up, the results suggest that on a decade-view, the majority are more optimistic and expect a fiscal union to be established that may provide a stronger basis for the Euro.”
Aviva Investors also surveyed managers on GDP growth, interest rates and inflation. In comparing US, UK and Germany, 83 percent of survey respondents said they expect the US to register the highest growth in gross domestic product (GDP) in 2012, while 17 percent believe Germany will come out on top. No managers believe the UK will have the highest growth in GDP of these three economies, however, just under half expect it to have the highest growth in inflation (48 percent).
In response to where to expect interest rate increases, half of the managers surveyed (54 percent) said interest rates will increase before the end of 2013, with the US most likely and the EU least likely to raise rates. One third (33 percent), however, do not expect rate increases until at least 2014.
The Aviva Investors multi-manager team manages over USD17 billion across portfolios investing in private equity, real estate, multi asset funds (including equity and fixed income) and hedge funds.
