Popularity of Global Investing Increases Worldwide
Plans to invest outside domestic markets increase over the next decade, according to Franklin Templeton Global Investor Sentiment Survey
Enthusiasm for global markets is on the rise. The Franklin Templeton Global Investor Sentiment Survey http://www.franklintempleton.co.za/globalsurvey found that half of respondents plan to invest outside their home country in 2011. Those numbers increase over the long term, with 62 percent of all respondents planning to invest in global markets over the next 10 years.
In the first of its kind global survey of 13,076 people in 12 countries, 60 percent of global respondents think their own country’s stock market will increase in 2011. Yet, only 33 percent believe it will perform better compared with the rest of the world, illustrating a willingness to consider opportunities in the global marketplace. Respondents in Asia were most optimistic, while those in Europe were the least optimistic.
“With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities,” said Greg Johnson, president and chief executive officer of Franklin Templeton Investments. “A diversified portfolio today is no longer just a mix of asset classes but also a mix of geographies.”
Emerging vs. Developed Markets
The survey found stark regional differences in opinion on whether the best investment opportunities exist in emerging versus developed markets. A majority of those in Asia (86 percent) and Latin America (61 percent) believe the best investment opportunities over the next 10 years will be found in emerging markets. Europeans are almost evenly split with 53 percent looking to emerging markets, while in the U.S. and Canada, only 37 percent believe emerging markets are going to provide the best returns in the decade ahead.
Perception vs. Reality
The survey also demonstrated that there is a surprising disconnect between where the perceived best investment opportunities (both equity and fixed income) lie over the next 10 years versus planned investment behavior. Three-quarters of global respondents recognize that equity opportunities (76 percent) and fixed income opportunities (74 percent) exist outside of their home country only, but just three in five (62 percent) indicate they plan to invest outside of their home country over the next 10 years. The greatest opportunity worldwide is perceived to be in Asia, with 28 percent of all respondents believing the best equity opportunities and 17 percent of all respondents believing the best fixed income opportunities will be there over the next 10 years.
“The market decline of 2008 and early 2009 is continuing to influence investors’ perception of recent stock market performance”, said Mike King, Director: Africa, Franklin Templeton Investments. “The survey tells us, however, that investors recognize the importance of equity investing going forward. We believe that if investors focus on the longer-term opportunity provided by equities, the case is very compelling, and looking globally for those investments is a key to building a diversified portfolio.”
Methodology
The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, an Infogroup company, included responses from 13,076 individuals in 12 countries: Brazil, Chile and Mexico in Latin America; Hong Kong, India, South Korea and Singapore in Asia; Germany, Italy and the UK in Europe, and the U.S. and Canada in North America. Survey respondents were between the ages of 18 and 64 in all countries, except in the UK and U.S. where survey respondents were 18 years of age and older. Surveys were completed from January 6 to 17 in all countries except the U.S. where the survey was completed from January 6 to 7. Data were weighted to make the results representative in each country.
