While just 34% of respondents to the Franklin Templeton poll currently have investments outside of their own country’s market, only 33% believe their country will perform better compared with the rest of the world in 2011. “With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities. A diversified portfolio today is no longer just a mix of asset classes, but also a mix of geographies,” said Greg Johnson, president and chief executive officer of Franklin Templeton Investments. The fact that just over a third of respondents claim to have global investments aligns with Franklin Templeton’s earlier survey of advisers, which found that many advisers feel investors are under-weighted in global markets (see “Advisers Say Global Investments are Under-Weighted“).
Of the 1,049 U.S. survey respondents, 62% indicated that they believe the U.S. stock market will advance in 2011, but only 27% believe it will perform better than stock markets across the world.
Survey findings revealed a gap between beliefs and actions regarding the global investment opportunity. When considering equities in particular, nearly three-quarters (73%) of U.S. respondents stated that the best opportunities will lie in countries other than the U.S. over the next 10 years. However, the survey showed that 40% of Americans have investments outside the U.S. market, with results revealing only a 7% increase among those who intend to invest outside the U.S. in the coming year (47%). When looking out over the next decade, 53% of U.S. respondents plan to invest outside the U.S. market.
The Franklin Templetonsurvey also found that the global recession continues to impact investor perceptions negatively. Half (49%) of American respondents believe the U.S. stock market was either down or flat in 2010 when, in fact, the S&P 500 Index recorded a gain of 15.06% in 2010.
When comparing market performance versus the rest of the world, only 21% of Americans believe the U.S. stock market had better performance in 2010. While emerging markets (as represented by the MSCI Emerging Markets Index) did record a 19.20% gain, S&P 500 Index performance of 15.06% exceeded the 9.43% gain for rest of the world (as represented by MSCI World ex USA Index) last year.
The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, 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 U.K. 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 U.K. and U.S. where survey respondents were 18 years of age and older. Surveys were completed from January 6-17 in all countries except the U.S. where surveys were completed from January 6-7.
The survey report is here.