The survey, conducted by Aviva Investors’ multi-manager team showed return expectations for 2012 across a spectrum of asset classes, with equity managers the most optimistic and fixed income managers decidedly bearish.
In total 188 external fund managers based in the US, UK, Europe, Asia Pacific and Latin America were surveyed.
Specifically, 64% of equity mangers expect returns in excess of 5% and only 3% expect negative returns.
Meanwhile, only 7% of fixed income managers expect returns of more than 5% from sovereign bonds, with 20% of them expecting negative returns from sovereign bonds and 13% expecting negative returns from corporate debt.
Real estate managers also had mixed outlooks, with the majority expecting capital returns between 0% and 10%, 17% expecting capital value falls and 14% expecting capital growth of more than 10%.
Nick Mansley, global director of multi-manager at Aviva Investors, said: "While equities might normally be expected to deliver higher returns, given the current market conditions the optimism – or lack of pessimism – of equity managers unveiled by our survey is somewhat surprising.
"The fact that some fixed income managers are actually expecting negative returns is perhaps less surprising given the levels that yields have reached in some markets but is a negative indicator for the prospects for the asset class."
Yield hunger
Also in the survey, Aviva Investors said an increased focus on generating income had been revealed, regardless of asset class.
At least two-thirds of fund managers running fixed income, equity and real estate mandates believed clients are more focused on income today than previously.
The results showed 83% of real estate managers, 71% of equity managers and 67% of fixed income managers felt more clients were income-driven. Hedge fund managers were the one exception, with only 9% citing an increased desire for yield.
Mansley said: "In an environment of low cash yields and continued uncertainty around economic growth it is not surprising that investors are more focused on income. We expect this to be a long-lasting theme across several asset classes.
"The fact equity investors are seeing more of an increased focus on income and are more concerned about inflation than fixed income managers turns the world of investment on its head and may reflect the broader uncertainty in markets at this point in time."
