Maintain positions. This is the main recommendation of financial advisors for the next semester. Most of them choose maintain your current exposure to equities, or to increase it; and there are few who plan to reduce it. This follows from the last EFPA-elEconomista.es survey, a survey that is carried out twice a year and is the result of collaboration between the European Association of Financial Advisory and Planning in Spain (EFPA, for its acronym in English) and this newspaper. On this occasion, nearly 280 professionals participated
To the first of the questions posed, “in the next semester, do you plan to increase, decrease or maintain your exposure to equities?”, the experts have responded mostly “maintain” (this one has accounted for 53% of the responses), but a fairly high percentage has also chosen to “go up” (35%). Despite the increases that this asset has already experienced, only the remaining 12% will reduce the weight of the bag in your wallet. By geography, the weighting of Spanish equities compared to the rest of the markets will remain the same (45% will leave it unchanged) or will be reduced (42%). Only 13% of these experts will increase exposure to Spanish listed companies compared to that of other countries or regions.
After a year 2024 that, as far as stock markets are concerned, has beaten all expectations (with the S&P 500 rising 27% and the Nasdaq 100 almost 30%), analysts and managers are optimistic about what is to come in 2025. The market still expects a 10% rise in the aforementioned S&P 500 in the next 12 months, an 8% rise in the Nasdaq 100 and another 14% in the EuroStoxx 50. European indices have registered more timid increases than the American ones this year, with the EuroStoxx scoring 9.4%, according to Bloomberg. The most bearish week for the Ibex 35 since the beginning of November, does it open a new way to buy?
In the case of the Ibex 35, the increase in 2024 is around 16% and its upward potential reaches 14%. A few days ago, in their presentation of perspectives for 2025, Renta 4 analysts went a little further and predicted a 16% rise in the Ibex for 2025. They highlighted that the domestic stock market “continues to trade cheaply, with a discount of 15 % versus its historical average, while the EuroStoxx is in line with its average multiples.” In any case, EFPA financial advisors choose not to increase the weight of Spanish equities in the portfolio.
The star market for 2025 is the United States. And in particular, medium and small companies, which should be favored by the rate reduction process that is already underway in both Europe and the US. In his presentation of outlook for the next year, Mabrouk Chetouane, head of global market strategy at Natixis IM Solutions, explained that there are opportunities to diversify the allocation to the US market, currently highly concentrated in large caps, taking exposure to mid-cap companies, which are better positioned for next year. The mid-sized US listed companies have better profit growth prospects than large and small companies for 2025 and 2026: the expected increase in profits in the S&P Mid Cap is close to 20% for both years, compared to 14% and a 13% in the S&P 500.
In fixed income, active management
As far as fixed income is concerned, 2024 has been a volatile year, in which this asset has reflected with fluctuations the changes in expectations of rate cuts by central banks. Financial advisors are in favor of maintaining exposure to bonds (52% of responses) or increasing it (23%). Another 24% would reduce the weight of debt in portfolios.
With only two weeks left in the year, the vast majority of debt categories show gains by price. Global debt – whose behavior reflects the Bloomberg Global Aggregate index – is one of the exceptions, since it fell 0.50%.
Looking ahead to next year, managers agree that active management will be key to moving into fixed income. Borja León, Merchbanc’s Flexible Fixed Income manager, recently explained it during his speech at the Active Management League Forum of elEconomista.es: “That thing of sitting on a bond, collecting the coupon and forgetting about it is something that has already happened.” left behind. Even in the process of lowering rates, money can be lost in fixed income. Let’s not assume that achieving 4% is easy, it must be managed,” he warned. They mentioned this same idea in Natixis AM; The French manager considers that this will be necessary stock picking or selection of emitters to weather the rises and falls of the tide that we will see. Within the framework of the same event, experts agreed that it is time to lengthen maturities slightly, to the range of 3 to 5 years. All this, in a context in which the Letters have lost a lot of attractiveness (their yields have fallen to around 2.20%) and the 10-year bond has not managed to recover 3% (despite the increases in the yield of the last week, it is around 2.9%).
LinkedinBeloud
#market #financial #advisors #maintain #increase #exposure #stock #market
