Investors Upgrade EM Outlook from One Year Ago, Columbia Threadneedle Survey Finds

At the end of 2016, the survey's Investor Sentiment Score dropped 9% from Q2 to 627, indicating investors generally have a "neutral" outlook towards EM for the next 12 months (Graphic: Columbia Threadneedle).

???pagination.previous??? ???pagination.next???

BOSTON--()--Investors have boosted their sentiment towards emerging markets (EM) since this time last year, according to the Columbia Threadneedle Investments Emerging Market Investor Sentiment Survey released today.

The survey, a biannual poll of financial advisors and investment professionals focusing on their sentiment and equity allocations to emerging markets, can be downloaded here. Key themes from the survey include:

  • At the end of 2016, the survey’s Investor Sentiment Score dropped 9% from Q2 to 627, indicating investors generally have a “neutral” outlook towards EM for the next 12 months
  • While sentiment is down from Q2, it is up 27% from the end of 2015

The results are consistent with market performance that showed EM was up 10.8% in 2016, but underperformed the U.S. markets following the presidential election.1 Other key findings include:

  • “Positive” was the most common answer (45%) for respondents’ outlook for EM equities over the next 12 months, up from end of 2015 when “Positive” was the least common answer (26%)
  • 64% of respondents expect to stay the course with their EM allocation over next 12 months, while only 28% expect to increase it, compared to mid-2016 when 46% expected to increase their allocation
  • 85% of respondents say their current EM allocation is about the same or higher than 12 months ago, while only 15% said their allocation was lower, versus 37% of respondents at the end of 2015

“While EM sentiment may have slipped slightly last year, the election did not significantly impact allocations, indicated by our respondents who said they mostly expect to maintain their allocation over the next year,” said Marc Zeitoun, Head of Strategic Beta at Columbia Threadneedle Investments. “Representing 40% of global gross domestic product (GDP), EM is not only the largest portion of the global economy, but the fastest-growing one.”2

The survey also included results that found:

  • 54% of respondents use strategic beta funds in their portfolios, with the primary reasons for doing so to lower overall fees (28%) and access a specific factor (26%)
  • 58% of respondents use strategic beta funds as a complement or satellite to a benchmark exposure or to an active manager

“While strategic beta adoption has moved more quickly in other regions, we have found that EM investors who have embraced strategic beta have seen outperformance at a lower expense,” Mr. Zeitoun added. “We are encouraged to see that 58% of respondents use strategic beta as a complement to a benchmark exposure or to an active manager.”

About the Columbia Threadneedle Investments EM Investor Sentiment Survey:
The survey was conducted from Dec. 1, 2016 to Jan. 10, 2017. The respondents included 75 financial advisors and financial professionals, with over 66% managing more than $100 million in assets. Launched in 2015 by Emerging Global Advisors, LLC, an emerging markets asset manager which was acquired by Columbia Management Investment Advisors, LLC on Sept. 1, 2016, this is the fifth time the survey has been conducted. The survey can be downloaded here.

About Columbia Threadneedle Investments:
Columbia Threadneedle Investments is a leading global asset management group that provides a broad range of investment strategies and solutions for individual, institutional and corporate clients around the world.

With more than 2,000 people, including over 450 investment professionals based in North America, Europe and Asia, we manage $454 billion3 of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives.

Columbia Threadneedle Investments is the global asset management group of Ameriprise Financial, Inc. (NYSE: AMP).

For more information, please visit https://www.columbiathreadneedleus.com/ and http://www.columbiathreadneedleetf.com/.

1Bloomberg as of December 31, 2016. Emerging Market performance represented by the MSCI Emerging Markets Index and U.S. performance represented by the S&P 500 Index. From November 9, 2016 –December 31, 2016, the MSCI Emerging Markets Index returned -4.13% and the S&P 500 index returned 4.98%. Indexes are unmanaged and unavailable for investment.

2International Monetary Fund World Economic Outlook as of October 2016.

3As of December 31, 2016.

The content of this presentation is presented for general information purposes only. Nothing contained herein should be considered a recommendation or advice to purchase or sell any security. While the information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and it should not be relied on as such or be the basis for an investment decision. The statements and opinions expressed are those of Columbia Management Investment Advisers, LLC and are as of the date of this presentation. All information is historical and not indicative of future results, and subject to change. This presentation may include estimates, projections and other “forward-looking statements”. Due to numerous factors, actual events may differ substantially from those presented. Columbia Management Investment Advisers, LLC assumes no duty to update any such statements. Past performance does not guarantee future results.

MSCI Emerging Markets (EM) Index is designed to measure the equity market performance in global emerging markets. S&P 500 Index is a broad-based measure of U.S. stock market performance. Strategic Beta is a category of beta products designed to outperform a market benchmark or provide a specialized exposure. One cannot invest directly in an index.

Effective September 1, 2016, Emerging Global Advisors, LLC was acquired by Columbia Management Investment Advisers, LLC (CMIA). In connection with the acquisition, CMIA is the investment manager to EGShares Funds as of that date. On October 19, 2016, the EGShares Funds were renamed as Columbia Funds. The Funds are distributed by ALPS Distributors, Inc., which is not affiliated with CMIA. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.

Investment products offered through Columbia Management Investment Distributors, Inc., member FINRA. Advisory services provided by Columbia Management Investment Advisers, LLC.

CT-MK (02/17) 1703219

Contacts

For Columbia Threadneedle Investments
Carlos Melville, 617-897-9384
carlos.melville@ampf.com
or
Michael Chiong, 646-922-7764
mchiong@jconnelly.com

Release Summary

Investors have boosted their sentiment towards emerging markets (EM) since this time last year, according to the Columbia Threadneedle Investments Emerging Market Investor Sentiment Survey.

Contacts

For Columbia Threadneedle Investments
Carlos Melville, 617-897-9384
carlos.melville@ampf.com
or
Michael Chiong, 646-922-7764
mchiong@jconnelly.com