Nearly seven out of 10 (68%) institutional investors expect a significant correction of at least 10% on global stockmarkets by August 2020, according to new research1 by Managing Partners Group (MPG), the international asset management group. This includes 16% who expect a correction to happen by February 2020.
A likely reason for a correction is economic problems in China, according to 57% of investors. Other reasons cited include: the US stock market overheating (41%); political problems in Europe (34%); and economic problems in the Eurozone (29%).
More than half (53%) expect a global economic recession in 2020, with 28% expecting it in H1 and 25% in H2. One in five (20%) expect it to happen in 2021.
Jeremy Leach, Chief Executive Officer, Managing Partners Group, commented:“Equities are clearly over-priced, based on their current yields. The economic recovery that began in 2009 is losing momentum and political uncertainty is growing too, created by issues such as the US-China trade war, Brexit and growing tensions in the Middle East.
Given our research shows a correction is widely anticipated by institutional investors, they must be seriously questioning their exposure to equities. Faced with such challenges, investors need investment vehicles that have the flexibility to assess opportunities worldwide. They also need management teams with the experience to assess fast-moving markets and select the right opportunities.”