Enthusiasm for global markets is on the rise. The Franklin Templeton Global Investor Sentiment Survey found that half of respondents plan to invest outside their home country in 2011. Those numbers increase over the long term, with 62% of all respondents planning to invest in global markets over the next 10 years.
In the first of its kind global survey of 13,076 people in 12 countries, 60% of global respondents think their own country’s stock market will increase in 2011. Yet, only 33% believe it will perform better compared with the rest of the world and indicate a preference to invest outside their home markets in the coming years. Globally, 34% currently invest outside of their domestic market, while that number jumps up to 50% when looking at 2011.
“With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities,” said Greg Johnson, president and chief executive officer of Franklin Templeton Investments. “A diversified portfolio today is no longer just a mix of asset classes but also a mix of geographies.”
Emerging vs. Developed Markets
The survey found stark regional differences in opinion on whether the best investment opportunities exist in emerging versus developed markets. A majority of those in Asia (8%) and Latin America (61%) believe the best investment opportunities over the next 10 years will be found in emerging markets. Europeans are almost evenly split with 53% looking to emerging markets, while in the U.S. and Canada, only 37 % believe emerging markets are going to provide the best returns in the decade ahead.
India vs. the World
Respondents in India are optimistic about the current state of the global economy, with two-thirds (65%) saying they believe it has improved. Those in India are optimistic about the domestic stock market performance being better than the global counterparts. Almost three in five (58%) believe that India’s stock market did better than the global markets in 2010. Slightly more (61%) think it will do better in 2011, and that jumps up to 82% when asked if India’s stock market will do better than the rest of the world over the next 10 years. Fifty-three% of Indian respondents believe that mutual funds are best suited to meet long term goals, such as retirement and children’s education. The study also reveals Indian respondents believe patience (35 %) and timing ( 34 %) are the most important factors for successful investing in stock markets.
Harshendu Bindal, President, Franklin Templeton India said, “The survey clearly shows the growing optimism in India about the state of the economy and growth prospects. Despite this confidence in local markets, it is interesting to note that many people are considering increasing their global exposure over the coming years. We believe this is a positive trend as it helps Indian investors diversify their portfolio across countries and asset classes. A global asset manager like Franklin Templeton with a strong local product line as well as global offerings with over 60 years of track record across market cycles, is uniquely positioned to serve domestic needs as well as the growing need for global exposure.”
Methodology
The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, an Infogroup company, included responses from 13,076 individuals in 12 countries: Brazil, Chile and Mexico in Latin America; Hong Kong, India, South Korea and Singapore in Asia; Germany, Italy and the UK in Europe, and the U.S. and Canada in North America. Survey respondents were between the ages of 18 and 64 in all countries, except in the UK and U.S. where survey respondents were 18 years of age and older. Surveys were completed from January 6 to 17 in all countries except the U.S. where the survey was completed from January 6 to 7. Data were weighted to make the results representative in each country.
