11 Jan 2012 | Debbie Crawford

Fund Manager Predictions for 2012 

The Association of Investment Companies (AIC) has published its 9th annual fund manager poll.  It is based on responses received from investment company fund managers representing £18 billion of assets - a fifth of the industry.

According to the results, a massive 96% of the managers who responded expect another volatile year in 2012.  It’s not all negative though, as 71% still expect markets to ultimately go up this year.  Some of the reasons for this optimism included 26% of managers being encouraged by strong company balance sheets, and a further 26% believing that equities still represent good value.

Emerging Markets was tipped to be the top performing region for the third year running with 27% of the vote, compared to 20% last year.  The US was second with 19% of the vote, more than doubling last year’s result of 8%.  Europe and Asia Pacific ex Japan both followed with 11% each.

The research also found that managers expect the Eurozone debt crisis to dominate again this year, with nearly two thirds thinking that it represents the single biggest threat to equities in 2012. As a result, only 50% think that equities will outperform other asset classes, with 13% expecting cash and 8% expecting gold to outperform.

As for the markets, there were mixed views as to how managers expect the FTSE 100 to close this year.  At the more optimistic end of the scale, 20% expect it to close between 6000-6500, with 30% expecting it to close between 5500-6000 and a further 30% expecting it to continue trading between 5000-5500.  Meanwhile a more cautious 10% expect markets to close in 2012 between 4500-5000, whilst 10% expect it to be under 4500.

Baillie Gifford offers a range of investment trusts, covering global and specialist markets.  For more information, visit our website.