Respondents included portfolio managers, research analysts, and C-suite executives who mentioned political risks, including secessionist and nationalistic movements, as the most underestimated risks that could negatively affect markets in the next five years.
The annual GMSS survey measured the opinion of 5,259 CFA charter holders and members, representing the views of professional investors around the world. The respondents were also responsible for reviewing the complete report to tabulate the survey results.
"The purpose of this survey is to gather feedback on market sentiment, performance, and market integrity issues, and to further our mission of promoting ethical and trustworthy investment markets," Nerina Visser of the CFA Society says. "According to the survey, local respondents expect an indifferent Gross Domestic Product growth (an average of 1.6%) and anticipate a slightly higher 2.2% growth for the global economy. They expect continued accommodative central bank policies (40%) and de-leveraging and decreases in global capital flows (19%) to have the biggest positive impact on global capital markets in 2015."
"The respondents consider the biggest risks to the economy to be political instability (26%) and a rise in interest rates (23%). They do however see a rise in interest rates (32%) and weak developed market economies (22%) as the biggest risks to global capital markets in 2015," Visser says.
When asked to identify the top underestimated risks globally over the next five years, respondents indicated that political risks, including secessionist and nationalistic movements (34%), and the impact of the demographic trend of ageing populations (23%) are the most significant.
A mere 16% of CFA Society members expect employment opportunities to increase in the market in 2015, while another 16% believe they will decrease. About 68% expect job opportunities to stay the same.
"70% of respondents believe a lack of ethical culture within financial firms is the top factor contributing to the current lack of trust in the finance industry. 33% of these respondents view zero-tolerance policies by top management for ethical breaches as the firm-level action most needed to help improve investor trust and confidence. Better alignment of compensation with investor objectives finished second, at 32%," Visser concludes.
