Halifax

Halifax

November 26, 2013 12:10 ET

Investors Favour Far East to Deliver Best Returns Over the Next Decade

Research by Halifax Share Dealing finds a quarter of UK fund investors believe China will outperform all other countries and economic regions

LONDON, ENGLAND--(Marketwired - Nov. 26, 2013) - Almost a quarter (24.3%) of retail fund investors believe China will outperform all other countries and economic regions over the next ten years, according to the Halifax Share Dealing Funds Focus.

Following positive economic data from China last month which showed GDP growth of 7.8% (year-on-year) in Q3, the research found investors believe China will deliver the best returns over the next decade, with 10.8% looking to South America, 10.3% suggesting Europe, and the same amount (10.3%) favouring India.

Damian Stansfield, managing director of Halifax Share Dealing, says:

"While China confirmed its interest in the UK with the news it is looking to make a significant investment in civil nuclear projects in the UK, investors here still believe the overseas markets offer the best opportunities for growth and almost a quarter predict China will deliver the best return on investment over the next decade.

"There are a wide range of funds targeting opportunities in the Far East but, as ever, investors need to research which funds best match their investment goals."

Investors confident China remains land of opportunity
Which country or economic region will show the best investment returns over the next decade?
China 24.3 %
South America 10.8 %
Europe 10.3 %
India 10.3 %
Japan 5.9 %
Middle East and North Africa 4.3 %
North America 4.3 %
Australia 3.8 %
Russia 1.1 %
Not sure 24.9 %
Source: Halifax Share Dealing

Over the last three years the top performing funds in the China/Greater China sector have come from Invesco and Neptune. In terms of short-term performance (one year) they are joined by Fidelity, Threadneedle, and Baillie Gifford.

Fund Name Price 1 Yr 1 Yr 3 Yr
Invesco Perpetual Hong Kong & China No Trail Acc NAV 165.79p 7.52 % 31.46 % 18.13 %
Invesco Perpetual Hong Kong & China Acc 422.34p 7.38 % 30.80 % 16.36 %
Neptune Greater China Income B Acc NAV 119.20p 1.02 % 11.40 % 7.48 %
Neptune Greater China Income A Acc NAV 118.70p 0.85 % 10.83 % 6.84 %
Threadneedle China Opportunities 1 Retail Net Acc NAV 192.31p 6.29 % 24.76 % 2.06 %
Baring BAM China Growth A Acc NAV 111.70p 2.29 % 9.94 % 0.00 %
Fidelity China Consumer 01 A Acc NAV 128.80p 8.33 % 25.78 % 0.00 %
Baillie Gifford Greater China A Net Acc 210.20p 4.79 % 14.80 % -3.04 %
Neptune China A Acc NAV 299.40p 5.65 % 13.93 % -5.37 %
Premier China Enterprise A Net Acc NAV 183.31p 5.52 % 12.13 % -7.02 %
Source: Digital Look Ltd as at 30/10/13. This table should not be seen as a recommendation to buy.

Investors favour equity funds

More than one third (36.8%) of retail investors anticipate equity funds will deliver the best returns over the next year.

Just 14.6% believe balanced funds (which invest in both equities and fixed income securities) will generate the greatest returns; with even fewer investors (5.4%) predicting fixed income funds will outperform all others.

What type of managed funds or ETFs do you think will generate the best returns during the next 12 months? Sept 2013
Equity funds (primarily in common stocks) 36.8 %
Balanced funds (invest in both equities and fixed income securities) 14.6 %
Fixed income funds (primarily in long-term corporate, government and municipal bonds) 5.4 %
Money market funds (primarily in short-term, high-quality fixed income securities) 3.2 %
Don't know 40 %
Source: Halifax Share Dealing

Damian Stansfield, managing director of Halifax Share Dealing, adds:

"The global financial situation - including the impact of quantitative easing - has contributed to the prolonged bond rally but investors are now forecasting equity funds will deliver the best returns over the coming year.

"Asset allocation depends on investors' attitude to risk and their individual circumstances, but over the long term a well diversified portfolio usually offers the greatest chance of positive returns."

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