CIO sentiment towards almost all risk assets has turned positive compared to 12 months ago, according to Asset Risk Consultants’ (ARC) latest market sentiment survey.
The survey monitors responses from 100 CIOs from across the industry. ARC found that private client investment managers have become positive on most ‘risk assets’ compared to March 2023, with the exception of cash.
The biggest positive sentiment swings by sector were Japan, healthcare and IT, and gold.
According to ARC, the swing in positive sentiment suggests that investment managers now have greater clarity on the direction of travel for interest rates and inflation.
In March last year, a full-blown recession in the US hadn’t been discounted, however many now anticipate a soft landing.
Meanwhile, CIOs were most negative on commercial property compared to last year, with the sector continuing to struggle amid lower occupancy rates and tighter lending conditions.
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Positive DFM returns in March
The consultancy also produces the ARC Indices, which collects performance data of over 350,000 investment portfolios, net of fees, supplied by around 140 investment managers to establish the actual returns being seen by real clients.
The ARC Steady Growth Index, which is based on the most common risk profile run by discretionary managers, rose 4% in the first quarter of 2024.
ARC Equity Risk, which monitors portfolios with an 80-110% risk relative to equities, was the highest returner at 5%. Meanwhile, ARC Cautious rose 1.9%.
Daniel Hurdley, ARC managing director for research, said: “The run of good news for investors continued in March with almost all asset classes producing positive returns for the month and several markets hitting record highs, notably the S&P 500 and gold benefiting from the expectation of future interest rate cuts.
“While returns from the technology sector cooled as the performance of some of the key companies diverged, the energy sector performed strongly after underperforming earlier in the quarter. As a result for Q1 2024, the ARC Indices are estimated to be positive in all currencies and risk categories.”
