Relative Performance Real And Anticipated

Marc Chandler | Aug 22, 2014 12:51AM ET

This Financial Times on its Beyondbrics blog . It shows that institutional investors in the survey picked emerging market equities as the most attractive investment for the next 6-12 months (two months ago).US, global and European equities, were bunched together. Note that of the European equities, the euro zone equities are expected to under-perform, coming in seventh of the top ten.

Bringing up the rear is local currency debt of emerging markets, though their hard currency debt is not expect to fare much better. The same can be said for the emerging market corporate debt.
Mixed in there, as well, is the expectation that asset-backed securities and mortgage- backed securities are also not expected to shine. While it may be understandable not to expect MBS to be a stronger performer, as other bond markets are not expected to top performers and the Federal Reserve's purchases will come to an end. However, the Bank of England and the European Central Bank are looking for ways to support the European ABS market. Could measures, which are expected in 2015, be ill-timed? Are institutional investors in the survey too cynical of official efforts?

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Written By: Marc Chandler

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