Investment Professionals Assess Future of Finance at CFA Institute European Investment Conference

European investment professionals converge in London today for the sixth annual CFA Institute European Investment Conference:Beyond Austerity: Opportunities for European Investors in the Global Market. The conference will bring together Europe’s most eminent investment professionals and economists to debate the future of finance in Europe and beyond.

Chaired by Gillian Tett, Assistant Editor of theFinancial Times, and with a keynote address delivered by Martin Wheatley, Chief Executive, Financial Conduct Authority,the diverse line-up of speakers includes Helena Morrisey, Yves Mersch, James Rickards, and John Chatfeild-Roberts, who will discuss opportunities for investors following times of austerity.

In his opening remarks, John Rogers, CFA, President and CEO of CFA Institute, commented: “The future of finance needs to be less about leverage, financial engineering, and stratospheric bonuses and more focused on better connecting capital with ideas, about long-term investing for the good of our world. Government policies that promote long-term savings, reduce taxes on long-term ownership, require transparency and good governance practices can help hasten this welcome change in our financial markets.” 

Ahead of the conference, CFA Institute, the global association of investment professionals that sets the standard for professional excellence and credentials, gauged the sentiments of its members on the most important issues that are challenging investors in the current economic climate. The most important emerging theme in the financial markets is an end to easy monetary policy, according to 68% of investment professionals. Given the focus on monetary policy and economic recovery in the US, an end to easy monetary policy (58%) was selected as the most important by the majority of respondents, followed by the risk of China’s growth slowing down (35%), and rising bond yields (33%)*.

Additional highlights from the full survey include:

The expected equity risk premium (the extra return that investors demand over and above a risk free rate to invest in equities as a class) in the next 12 months will be 4-5% over the next 12 months

Competitive currency devaluation by major blocks is the most likely outcome in the currency markets

The most important lesson learned from the financial crisis is that short-termism is not sustainable, according to 31% of survey respondents.

The four largest barriers to investing in Africa are a lack of sufficient information and illiquid markets, insufficient legal protection for investors, corruption, and a poor perception due to political risk. 

*Note that respondents were able to select more than one choice in response to this question, therefore, the numbers do not add up to 100%.

The purpose of this survey was to gather feedback from members in Europe on key issues that are affecting investors ahead of the EIC conference. The questions are linked to the most topical speakers at the conference, united by the overarching theme of the conference.

On 8 October 2013, 7,000 CFA Institute members in Europe were invited via email to participate in an online survey. One reminder was sent to non-respondents on 16 October and the survey closed on 21 October 2013. 200 valid responses were received, for a response rate of 3% and a margin of error of ± 6.8%. 

The top job functions of respondents are portfolio manager (20%), research analyst (9%), risk manager (9%), strategist (7%) and investment banking analyst (6%). 50% of respondents listed other occupations and 8% of respondents did not provide an occupation.

The majority of respondents are located in United Kingdom (20%), Germany (15%), Switzerland (12%), and France (6%).