Investor sentiment toward emerging markets has improved over the past year.
Columbia Threadneedle Investments reported Tuesday that its latest investor sentiment survey score had dropped by 9% from the second quarter, but was up by 27% from the end of 2015.
The survey’s score registered 627 in the poll conducted during December and early January, indicating that investors generally had a neutral outlook toward emerging markets for the coming year, the report said.
The sentiment score is calculated based on the answers to the question: “Over the next 12 months, what is your outlook for emerging market equities?” A negative outlook is scored as 0 points, neutral as 500 points and positive as 1,000 points.
Seventy-five asset managers and financial advisors participated in the poll, two-thirds of which were managing more than $100 million in assets.
The report said the results were consistent with market performance that showed emerging markets were up 10.8% in 2016, but underperformed the U.S. markets following the presidential election.
Forty-one percent of respondents said they currently had 1% to 5% allocated to emerging markets, and 32% had 10 to 55% allocated.
Sixty-nine percent reported that their current allocation was about the same as 12 months ago. Only 15% said their allocation was lower, compared with 37% that said this at the end of 2015.
Positive was the year-ahead outlook for emerging markets of 45% of respondents, way up from 26% at the end of 2015.
Nearly two-thirds of respondents expected to maintain their current allocation over the next 12 months, while only 28% expected to increase it. In contrast, 46% of investors in the second quarter survey said they would increase their allocation.