Fund managers optimistic about stock markets

Fund managers across the world are confident about higher equity returns this year and believe that economic growth, though modest, will manifest a continued global recovery, a survey by global professional services firm Towers Watson said.

According to the survey, the investment managers surveyed show more optimism this year as compared to last year.

The survey found that respondents expect stock markets to revert to historical return levels in the next 10 years, while predictions about returns in 2010 are higher than these levels. According to managers, anticipated returns on global equities in 2010 is 10 per cent (compared with expectations of 6.7 per cent in 2009).

The US, UK, Euro zone, Australian, Japanese equity markets expect to deliver around nine per cent returns this year, while Asian equities are forecasted to give 14.5 per cent gains.

Expected equity volatility for 2010 is in the 15-22 per cent range, substantially down from the high ranges seen in the past two years, the survey revealed.

"The overall picture we get from this influential group is one of recovery, with established Western markets lagging the emerging markets on most measures," Towers Watson global head of investment Carl Hess said.