A year-end survey of advisors by State Street Global Advisors (SSGA) found that for the majority, their top concern was a slowdown in U.S. corporate profits and earnings growth, followed closely by increasing stock market volatility and “rising geopolitical tensions.” A Chinese economic hard landing was cited as the first, second or third top-level concern by less than a quarter of advisors surveyed, with only one in eight listing the Federal Reserve raising interest rates “too early” as a top-three concern.
At the same time, the 814 respondents (54% of whom were affiliated with national broker-dealers or IBDs) said their favorite asset classes were U.S. and international equities and investment grade fixed income. As for sectors, respondents said they were overweight technology, financial and health care stocks and were underweighting utilities, materials and energy stocks in client portfolios.
David Mazza, head of research for SPDR ETFs and SSGA Funds, said in a statement announcing the survey results that investors are “eyeing pockets of growth as the U.S. economic recovery moves from Wall Street to Main Street. Strength in consumer spending and the employment and housing markets combined with the potential for an improved lending market has many tilting their portfolios towards areas of higher earnings and revenue growth.”