CFA Institute - Global Market Sentiment Survey: Detailed results - January 2014
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Transcript of CFA Institute - Global Market Sentiment Survey: Detailed results - January 2014
GLOBAL MARKET SENTIMENT SURVEY 2014 DETAILED SURVEY RESULTS December 2013
CFA Institute
TABLE OF CONTENTS EXECUTIVE SUMMARY FULL RESULTS 1. INVESTMENT PROFESSIONALS INCREASINGLY CONFIDENT GLOBAL AND
LOCAL ECONOMIES WILL GROW IN 2014 2. POLITICAL INSTABILITY AND THE END OF QUANTITATIVE EASING BRING
UNCERTAINTY TO LOCAL MARKETS 3. MEMBERS CALL FOR GLOBAL OVERSIGHT AND LOCAL ENFORCEMENT 4. LACK OF ETHICAL CULTURE IN FINANCIAL FIRMS ERODING INVESTOR TRUST
ABOUT THIS STUDY
CFA Institute 3 Global Market Sentiment Survey 2014
EXECUTIVE SUMMARY CFA Institute members report greater optimism over economic prospects for the coming year, with an especially dramatic turn in sentiment from European members compared to last year. But these same investment professionals do not express confidence that the integrity of capital markets is improving. As markets rebound, CFA Institute is working to ensure that attention does not shift away from meaningful reforms that might restore investor trust and strengthen the financial system’s ability to resist shocks in the future.
CFA Institute
Economic turnaround in Europe is reflected in greater optimism about the worldwide economy, tempered by concerns over political instability.
INVESTMENT PROFESSIONALS INCREASINGLY CONFIDENT GLOBAL AND LOCAL ECONOMIES WILL GROW IN 2014
CFA Institute 5 Global Market Sentiment Survey 2014
63%
27%
9%
62%
27%
9%
56%
31%
12%
69%
23%
6%
Expand Stay roughly the same Contract
Global AMER APAC EMEA
“Not Sure” option not displayed
IN 2014, DO YOU EXPECT THE GLOBAL ECONOMY TO:
CFA Institute 6 Global Market Sentiment Survey 2014
“Not Sure” option not displayed
IN 2014, DO YOU EXPECT THE GLOBAL ECONOMY TO:
63%
78%
74%
70%
65%
64%
62%
62%
61%
59%
59%
56%
54%
48%
27%
16%
24%
23%
25%
21%
27%
28%
34%
31%
28%
31%
29%
34%
9%
6%
5%
9%
12%
10%
9%
4%
8%
12%
12%
15%
12%
Global
United Kingdom
Brazil
Germany
South Africa
Switzerland
Canada
USA
Japan
Australia
Singapore
India
Hong Kong
China
Expand Stay roughly the same Contract
CFA Institute 7 Global Market Sentiment Survey 2014
“Not Sure” option not displayed
IN 2014, DO YOU EXPECT THE GLOBAL ECONOMY TO:
34% 36%
25%
38% 34% 35%
30% 34%
29% 27%
42%
27%
40% 39%
32%
50%
38% 38% 41%
35%
20% 22% 24%
14%
63% 62%
56%
69%
27% 27% 31%
23%
9% 9% 12%
6%
Global AMER APAC EMEA Global AMER APAC EMEA Global AMER APAC EMEA
Expand Stay roughly the same Contract
2012 2013 2014
CFA Institute 8 Global Market Sentiment Survey 2014
57%
33%
9%
59%
32%
8%
52%
34%
13%
56%
34%
9%
Expand Stay roughly the same Contract
Local aggregate AMER APAC EMEA
“Not Sure” option not displayed
IN 2014, DO YOU EXPECT YOUR LOCAL ECONOMY TO:
CFA Institute 9 Global Market Sentiment Survey 2014
IN 2014, DO YOU EXPECT YOUR LOCAL ECONOMY TO:
“Not Sure” option not displayed
57%
74%
73%
65%
62%
61%
56%
52%
51%
47%
47%
46%
45%
37%
33%
22%
21%
33%
29%
28%
38%
32%
43%
43%
41%
40%
34%
44%
9%
3%
5%
1%
8%
9%
5%
15%
6%
9%
11%
14%
18%
18%
Local aggregate
United Kingdom
Japan
Germany
USA
India
Switzerland
Australia
Brazil
Canada
Singapore
South Africa
China
Hong Kong
Expand Stay roughly the same Contract
CFA Institute 10 Global Market Sentiment Survey 2014
IN 2014, DO YOU EXPECT YOUR LOCAL ECONOMY TO:
“Not Sure” option not displayed
42% 46%
47%
24%
40% 41%
31%
44%
17% 12%
21%
30%
45% 49%
46%
33%
38% 37% 36%
42%
16% 13%
16%
24%
57% 59%
52% 56%
33% 32% 34% 34%
9% 8%
13% 9%
Localaggregate
AMER APAC EMEA Localaggregate
AMER APAC EMEA Localaggregate
AMER APAC EMEA
Expand Stay roughly the same Contract
2012 2013 2014
CFA Institute 11 Global Market Sentiment Survey 2014
32%
26%
21%
8%
5%
2% 2%
5%
29% 28%
20%
10%
5%
2% 1%
5%
34%
26%
22%
4% 5%
3% 2%
3%
38%
22% 22%
5% 5%
2% 1%
5%
Increased focuson
resolving/easingglobal sovereigndebt challenges
Growth ratesamong emerging
economies
Increased focuson solutions to
create more jobs
Reducing taxrates on incomeand capital gain
Increasedmarket
transparency
Improvedregulation
Improvedenforcement of
existingregulation
Other
Global AMER APAC EMEA
*“No opinion” option excluded from results.
WHAT DO YOU SEE AS HAVING THE BIGGEST POSITIVE IMPACT ON GLOBAL CAPITAL MARKETS IN 2014?*
CFA Institute 12 Global Market Sentiment Survey 2014
32%
49%
45%
44%
43%
37%
35%
35%
34%
34%
34%
30%
27%
14%
26%
22%
22%
22%
30%
24%
23%
25%
29%
21%
26%
28%
28%
44%
21%
8%
12%
24%
19%
24%
26%
18%
22%
15%
21%
22%
21%
24%
Global
Brazil
Germany
India
Switzerland
Australia
Hong Kong
United Kingdom
Canada
China
South Africa
Singapore
USA
Japan
Increased focus on resolving/easing global sovereign debt challenges
Growth rates among emerging economies
Increased focus on solutions to create more jobs
*Displaying top three positive impacts on global capital markets.
“No opinion” option excluded from results.
WHAT DO YOU SEE AS HAVING THE BIGGEST POSITIVE IMPACT ON GLOBAL CAPITAL MARKETS IN 2014?*
CFA Institute
EQUITIES EXPECTED TO PROVIDE THE HIGHEST RETURN AMONG ASSEST CLASSES IN 2014
CFA Institute 14 Global Market Sentiment Survey 2014
RANK THE FOLLOWING ASSET CLASSES IN ORDER OF EXPECTED TOTAL RETURN IN THE GLOBAL MARKETS IN 2014*
71%
10% 9% 6%
4%
71%
11% 9%
5% 4%
68%
10% 8% 7% 7%
71%
11% 9%
6% 4%
Equities Commodities Precious metals Cash Bonds
Global AMER APAC EMEA
*Chart displaying proportion of members ranking the asset class as likely to have the highest expected return.
CFA Institute 15 Global Market Sentiment Survey 2014
RANK THE FOLLOWING ASSET CLASSES IN ORDER OF EXPECTED TOTAL RETURN IN THE GLOBAL MARKETS IN 2014*
71%
80%
77%
76%
75%
74%
73%
73%
71%
69%
69%
61%
55%
54%
10%
5%
9%
8%
11%
10%
10%
10%
5%
11%
13%
10%
11%
13%
9%
7%
7%
6%
9%
10%
9%
10%
9%
11%
9%
9%
13%
11%
6%
1%
2%
6%
3%
5%
5%
5%
8%
5%
7%
9%
12%
8%
4%
6%
6%
4%
3%
1%
3%
2%
7%
3%
3%
11%
10%
14%
Global
Japan
United Kingdom
Singapore
Australia
Switzerland
USA
South Africa
Hong Kong
Canada
Germany
China
Brazil
India
Equities Commodities Precious metals Cash Bonds
*Chart displaying proportion of members ranking the asset class as likely to have the highest expected return.
CFA Institute 16 Global Market Sentiment Survey 2014
RANK THE FOLLOWING ASSET CLASSES IN ORDER OF EXPECTED TOTAL RETURN IN THE GLOBAL MARKETS IN 2014*
*Chart displaying proportion of members ranking the asset class as likely to have the highest expected return.
41%
15%
25%
9% 10%
50%
16%
22%
4% 8%
71%
10% 9% 6%
4%
Equities Commodities Precious metals Cash Bonds
2012 2013 2014
CFA Institute
UNITED STATES AND CHINA CONTINUE TO PROVIDE THE BEST INVESTMENT OPPORTUNITIES
CFA Institute 18 Global Market Sentiment Survey 2014
WHICH EQUITY MARKET DO YOU THINK WILL PROVIDE THE BEST INVESTMENT OPPORTUNITY IN 2014?*
26%
10%
6% 6% 5%
3% 3% 3% 3% 2% 2% 2% 2% 2% 2% 2%
1% 1% 1% 1% 1% 1% 1% 1% 1% 1%
Global
*Chart shows proportion of members picking the market as the best investment opportunity
CFA Institute 19 Global Market Sentiment Survey 2014
WHICH EQUITY MARKET DO YOU THINK WILL PROVIDE THE BEST INVESTMENT OPPORTUNITY IN 2014?*
26%
10%
6% 6% 5%
31%
9%
5% 6% 6%
25%
20%
10%
5%
1%
16%
8%
6% 7%
6%
USA China Japan Germany Brazil
Global AMER APAC EMEA
*Chart shows proportion of members picking the market as the best investment opportunity (top 5 displayed)
CFA Institute
INVESTMENT SERVICES JOB MARKET OUTLOOK
CFA Institute 21 Global Market Sentiment Survey 2014
28%
50%
22%
26%
53%
20%
33%
44%
23%
27%
46%
27%
Increase Stay about the same Decrease
Local aggregate AMER APAC EMEA
IN 2014, DO YOU EXPECT EMPLOYMENT OPPORTUNITIES FOR INVESTMENT PROFESSIONALS IN YOUR LOCAL MARKET TO INCREASE, DECREASE, OR STAY ABOUT THE SAME?
“Not Sure” option excluded
CFA Institute 22 Global Market Sentiment Survey 2014
28%
55%
48%
45%
30%
30%
29%
27%
21%
19%
17%
17%
16%
16%
50%
30%
35%
43%
49%
38%
52%
50%
54%
50%
60%
53%
69%
38%
22%
15%
17%
12%
21%
32%
19%
24%
25%
30%
22%
31%
14%
46%
Local aggregate
Japan
China
United Kingdom
India
Australia
USA
Singapore
Hong Kong
Germany
Canada
Brazil
South Africa
Switzerland
Increase Stay about the same Decrease
IN 2014, DO YOU EXPECT EMPLOYMENT OPPORTUNITIES FOR INVESTMENT PROFESSIONALS IN YOUR LOCAL MARKET TO INCREASE, DECREASE, OR STAY ABOUT THE SAME?
“Not Sure” option excluded
CFA Institute 23 Global Market Sentiment Survey 2014
IN 2014, DO YOU EXPECT EMPLOYMENT OPPORTUNITIES FOR INVESTMENT PROFESSIONALS IN YOUR LOCAL MARKET TO INCREASE, DECREASE, OR STAY ABOUT THE SAME?
“Not Sure” option excluded
14%
51%
35%
17%
49%
33%
28%
50%
22%
Increase Stay about the same Decrease
2012 2013 2014
CFA Institute
Investment professionals in some major markets point towards political instability and unrest in the Middle East to impact local performance.
POLITICAL INSTABILITY AND THE END OF QUANTITATIVE EASING BRING UNCERTAINTY TO LOCAL MARKETS
CFA Institute 25 Global Market Sentiment Survey 2014
31%
25%
20%
13%
6%
2%
4%
32%
27%
18%
13%
5%
2%
4%
33%
21%
23%
13%
4%
2%
5%
28%
23% 24%
12%
7%
2%
4%
Weak economicconditions
Political instability Systemicdisruptions
Growth ratesamong emerging
economies
Excess regulation Weak regulation Other
Global AMER APAC EMEA
"No opinion” option excluded from results.
WHAT DO YOU SEE AS THE BIGGEST RISK TO GLOBAL CAPITAL MARKETS IN 2014?
CFA Institute 26 Global Market Sentiment Survey 2014
31%
44%
43%
39%
36%
32%
32%
30%
29%
24%
23%
22%
15%
12%
25%
19%
6%
14%
13%
27%
22%
32%
23%
28%
28%
30%
25%
43%
20%
13%
26%
19%
19%
17%
21%
18%
29%
27%
24%
21%
34%
12%
Global
China
India
South Africa
Brazil
USA
Hong Kong
Canada
Singapore
Australia
United Kingdom
Switzerland
Germany
Japan
Weak economic conditions Political instability Systemic disruptions
*Displaying top three risks to global markets.
“No opinion” option excluded from results.
WHAT DO YOU SEE AS THE BIGGEST RISK TO GLOBAL CAPITAL MARKETS IN 2014?*
CFA Institute 27 Global Market Sentiment Survey 2014
31%
28%
15%
10%
8%
3%
6%
31% 31%
16%
9%
5%
1%
7%
28%
24%
7%
12%
18%
6% 5%
33%
24%
17%
10%
6%
4% 5%
Weak economicconditions
Political instability Excess regulation Systemicdisruptions
Growth ratesamong emerging
economies
Weak regulation Other
Local aggregate AMER APAC EMEA
“No opinion” option excluded from results.
WHAT DO YOU SEE AS THE BIGGEST RISK TO YOUR LOCAL MARKET IN 2014?
CFA Institute 28 Global Market Sentiment Survey 2014
31%
49%
43%
41%
33%
30%
29%
28%
26%
24%
22%
21%
19%
15%
28%
2%
5%
13%
16%
9%
38%
37%
2%
21%
12%
5%
53%
78%
15%
7%
9%
16%
13%
8%
18%
18%
5%
6%
31%
43%
6%
3%
Local aggregate
Australia
Canada
United Kingdom
Japan
China
Brazil
USA
Singapore
Hong Kong
Germany
Switzerland
South Africa
India
Weak economic conditions Political instability Excess regulation
*Displaying top three risks to local markets.
“No opinion” option excluded from results.
WHAT DO YOU SEE AS THE BIGGEST RISK TO YOUR LOCAL MARKET IN 2014?*
CFA Institute 29 Global Market Sentiment Survey 2014
WHAT IMPACT, IF ANY, WILL THE FOLLOWING HAVE ON YOUR LOCAL MARKET IN 2014:
68%
14% 12% 5%
60%
23%
13%
4%
22%
59%
3%
15% 22%
39%
26%
13%
35%
26%
37%
2%
12% 13%
71%
4% 8%
11%
79%
2%
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Neg
ativ
e im
pact
No
impa
ct
Pos
itive
impa
ct
Don
’t kn
ow
Central banksattempts to end
quantitative easing
Effects on energyprices caused byunrest in Middle
East
Fallout from riggingof benchmark rates
Growth of non-banklending or shadow
banking sector
Political stability inyour home market
Progress of recoveryin China
Progress of recoveryin Europe
Scale: Negative impact, No impact, Positive impact and Don’t know
CFA Institute 30 Global Market Sentiment Survey 2014
68%
13%
52%
17% 22%
3%
18%
26%
43%
30%
13%
69%
9%
75% 72%
13%
75%
6%
25%
7%
39%
22% 23%
51%
13%
78%
7%
80%
65%
11%
68%
10%
22%
3%
20%
28% 23%
46%
10%
72%
8%
87%
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Negativeimpact
Positiveimpact
Central banksattempts to end
quantitative easing
Effects on energyprices caused byunrest in Middle
East
Fallout from riggingof benchmark rates
Growth of non-banklending or shadow
banking sector
Political stability inyour home market
Progress of recoveryin China
Progress of recoveryin Europe
AMER APAC EMEA
WHAT IMPACT, IF ANY, WILL THE FOLLOWING HAVE ON YOUR LOCAL MARKET IN 2014:
“No impact” and “Don’t know” option not displayed
Scale: Negative impact, No impact, Positive impact and Don’t know
CFA Institute 31 Global Market Sentiment Survey 2014
IN THE COMING 12 MONTHS, DO YOU ANTICIPATE A FINANCIAL BUBBLE IN YOUR LOCAL MARKET AND IF SO, WITHIN WHICH ASSET CLASS?
26%
13% 10%
1% 1% 1% 1%
47%
16% 15% 13%
1% 1% 1% 2%
51% 52%
7% 4%
2% 1% 1% 1%
32% 30%
10% 7%
1% 1% 1% 1%
50%
Real estate Equities Bonds Precious metals Commodities Cash Other Do not anticipatea financial bubble
Local aggregate AMER APAC EMEA
CFA Institute 32 Global Market Sentiment Survey 2014
26%
77%
68%
59%
51%
50%
48%
47%
43%
34%
32%
23%
9%
5%
13%
5%
5%
6%
9%
5%
8%
5%
5%
16%
12%
19%
27%
10%
3%
4%
5%
5%
3%
2%
8%
5%
13%
1%
14%
16%
7%
1%
0%
1%
7%
1%
2%
2%
1%
Local aggregate
China
Hong Kong
Singapore
United Kingdom
Australia
India
Switzerland
Canada
Germany
Brazil
Japan
USA
South Africa
Real estate Equities Bonds Precious metals
*Displaying top four response options (excluding proportion selecting no financial bubble)
IN THE COMING 12 MONTHS, DO YOU ANTICIPATE A FINANCIAL BUBBLE IN YOUR LOCAL MARKET AND IF SO, WITHIN WHICH ASSET CLASS?
CFA Institute
Globally, members cite improved regulation and oversight of global systemic risks as the most important action needed in 2014 to build investor trust and market integrity. At the local level members say better enforcement of existing laws and stronger corporate governance standards are the steps needed to improve market integrity.
MEMBERS CALL FOR GLOBAL OVERSIGHT AND LOCAL ENFORCEMENT
CFA Institute 34 Global Market Sentiment Survey 2014
22%
56%
21% 21%
57%
22% 23%
56%
21%
26%
56%
18%
Poor (1 + 2) 3 Excellent (4+5)
Global AMER APAC EMEA
Chart displays Poor(1+2), 3 and Excellent (4+5)
HOW WOULD YOU RATE THE LEVEL OF INTEGRITY OF GLOBAL CAPITAL MARKETS IN 2013? Scale: Poor (1) to Excellent (5)
CFA Institute 35 Global Market Sentiment Survey 2014
22%
32%
28%
26%
25%
25%
24%
23%
22%
20%
19%
18%
16%
13%
56%
56%
55%
53%
54%
53%
52%
55%
55%
60%
59%
56%
60%
61%
21%
12%
17%
21%
21%
22%
24%
22%
23%
19%
23%
27%
23%
26%
Global
Switzerland
India
Germany
Australia
Singapore
Japan
United Kingdom
USA
Canada
South Africa
Hong Kong
Brazil
China
Poor (1 + 2) 3 Excellent (4+5)
HOW WOULD YOU RATE THE LEVEL OF INTEGRITY OF GLOBAL CAPITAL MARKETS IN 2013? Scale: Poor (1) to Excellent (5)
CFA Institute 36 Global Market Sentiment Survey 2014
Chart displays Poor(1+2), 3 and Excellent (4+5)
HOW WOULD YOU RATE THE LEVEL OF INTEGRITY OF GLOBAL CAPITAL MARKETS IN 2013? Scale: Poor (1) to Excellent (5)
26%
54%
20% 22%
56%
21%
Poor (1 + 2) 3 Excellent (4+5)
2012 2013
CFA Institute 37 Global Market Sentiment Survey 2014
26%
68%
6%
23%
71%
6%
32%
61%
7%
27%
67%
6%
Better About the same Worse
Global AMER APAC EMEA
DO YOU THINK THE INTEGRITY OF GLOBAL CAPITAL MARKETS IN 2014 WILL BE BETTER OR WORSE THAN IN 2013?
CFA Institute 38 Global Market Sentiment Survey 2014
26%
39%
36%
34%
32%
32%
29%
28%
27%
24%
23%
23%
22%
22%
68%
56%
57%
57%
64%
62%
70%
67%
66%
69%
71%
69%
71%
70%
6%
5%
7%
8%
4%
6%
1%
5%
6%
6%
6%
8%
6%
8%
Global
China
Australia
India
Brazil
United Kingdom
Japan
South Africa
Singapore
Germany
Canada
Switzerland
USA
Hong Kong
Better About the same Worse
DO YOU THINK THE INTEGRITY OF GLOBAL CAPITAL MARKETS IN 2014 WILL BE BETTER OR WORSE THAN IN 2013?
CFA Institute 39 Global Market Sentiment Survey 2014
*Upcoming year displayed the future year (e.g. 2014) **Current year displayed the present year (e.g. 2013)
22%
56%
22% 26%
67%
7%
26%
68%
6%
Better About the same Worse
2012 2013 2014
DO YOU THINK THE INTEGRITY OF GLOBAL CAPITAL MARKETS IN (UPCOMING YEAR*) WILL BE BETTER OR WORSE THAN IN (CURRENT YEAR**)?
CFA Institute 40 Global Market Sentiment Survey 2014
29%
21%
17% 16%
11%
6%
10%
17%
24%
30%
15%
5%
Improved regulationand oversight of global
systemic risk
Improved transparencyof financial reportingand other corporate
disclosures
Improved corporategovernance practices
Improved enforcementof existing laws and
regulations
Improved markettrading rules on
transparency andfrequency of trades
Improved auditingpractices and
standards
GLOBALLY IN LOCAL MARKET
WHICH ONE OF THE FOLLOWING REGULATORY OR INDUSTRY ACTIONS IS MOST NEEDED IN THE COMING YEAR (2014) TO HELP IMPROVE INVESTOR TRUST AND MARKET INTEGRITY?
CFA Institute 41 Global Market Sentiment Survey 2014
29%
48%
46%
40%
39%
38%
37%
36%
32%
32%
30%
29%
29%
22%
21%
11%
15%
9%
13%
13%
15%
12%
18%
13%
15%
16%
12%
28%
17%
15%
11%
17%
18%
19%
16%
19%
21%
22%
19%
18%
23%
16%
16%
13%
9%
15%
14%
16%
17%
20%
16%
20%
10%
18%
18%
16%
11%
6%
13%
13%
13%
11%
8%
10%
11%
10%
18%
15%
15%
11%
6%
6%
7%
6%
4%
4%
8%
3%
1%
4%
8%
5%
4%
7%
Global
India
China
Hong Kong
Singapore
South Africa
Brazil
Germany
Australia
United Kingdom
Japan
Canada
Switzerland
USA
Improved regulation and oversight of globalsystemic riskImproved transparency of financial reportingand other corporate disclosuresImproved corporate governance practices
Improved enforcement of existing laws andregulationsImproved market trading rules on transparencyand frequency of tradesImproved auditing practices and standards
WHICH ONE OF THE FOLLOWING REGULATORY OR INDUSTRY ACTIONS IS MOST NEEDED GLOBALLY IN THE COMING YEAR (2014) TO HELP IMPROVE INVESTOR TRUST AND MARKET INTEGRITY?
CFA Institute 42 Global Market Sentiment Survey 2014
30%
41%
34%
33%
32%
32%
31%
30%
30%
30%
23%
21%
16%
11%
24%
24%
14%
22%
31%
24%
24%
27%
27%
19%
31%
31%
23%
48%
17%
17%
27%
16%
20%
16%
12%
14%
13%
16%
17%
20%
19%
13%
15%
7%
12%
15%
4%
9%
10%
13%
10%
21%
10%
9%
20%
13%
10%
3%
5%
9%
5%
10%
17%
12%
15%
10%
16%
10%
15%
5%
5%
8%
8%
4%
8%
8%
6%
4%
4%
4%
3%
9%
7%
11%
Local aggregate
Brazil
China
Canada
India
South Africa
United Kingdom
Australia
Germany
USA
Switzerland
Hong Kong
Singapore
Japan
Improved enforcement of existing laws andregulationsImproved corporate governance practices
Improved transparency of financial reportingand other corporate disclosuresImproved market trading rules on transparencyand frequency of tradesImproved regulation and oversight of globalsystemic riskImproved auditing practices and standards
WHICH ONE OF THE FOLLOWING REGULATORY OR INDUSTRY ACTIONS IS MOST NEEDED IN YOUR LOCAL MARKET FOR THE COMING YEAR (2014) TO HELP IMPROVE INVESTOR TRUST AND MARKET INTEGRITY?
CFA Institute 43 Global Market Sentiment Survey 2014
IN YOUR OPINION, IS EACH OF THE FOLLOWING REGULATORY REFORMS MORE LIKELY TO:
73%
16%
68%
12%
68%
12%
66%
27%
53%
33%
51%
27%
49%
34%
46%
20%
40%
24%
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Pre
vent
futu
re c
rises
Neg
ativ
e co
nseq
uenc
es
Require Banksto impair
troubled creditholdings on a
more consistentand timely basis
Increasedglobal
coordination ofmonitoring ofsystemic risks
Morestandardizedcontracts with
increasedcentral clearing
Increased bankcapital and
liquidityrequirements
Proposals likethe VolckerRule to limit
bank proprietarytrading
Proposals forring-fencing
retail bankingactivities
Designation of “too big to fail” institutions for
closer monitoring
Increasedregulatory
monitoring ofhedge funds
Reduce relianceon and
reference tocredit-ratings
agency ratings
Global
“Have no Impact” option not displayed “No opinion” option excluded
Scale: Have no impact, Prevent future financial crises, Result in unintended negative consequences and No opinion
CFA Institute 44 Global Market Sentiment Survey 2014
25% 24%
16%
13% 12%
10%
23% 23% 21%
11%
14%
9%
24%
32%
7%
20%
9% 8%
30%
21%
9%
15%
10%
15%
Mis-selling by financialadvisers
Market fraud Market tradingpractices
Integrity of financialreporting
Disclosure/use offinancial derivatives
Investmentmanagement
services/structure
Local aggregate AMER APAC EMEA
*Chart displaying proportion of members ranking the ethical issue as the most serious facing their local market.
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING YOUR LOCAL MARKET IN THE COMING YEAR (2014) IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute 45 Global Market Sentiment Survey 2014
25%
53%
48%
40%
34%
34%
31%
30%
27%
25%
22%
20%
14%
8%
24%
11%
12%
12%
17%
13%
21%
34%
28%
30%
27%
23%
52%
55%
16%
2%
12%
14%
14%
12%
12%
6%
4%
10%
7%
24%
2%
5%
Local aggregate
South Africa
Australia
Germany
Canada
Switzerland
United Kingdom
Japan
India
Singapore
Hong Kong
USA
Brazil
China
Mis-selling by financial advisers Market fraud Market trading practices
*Chart displaying the top three ethical issues facing local market (based on global rankings)
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING YOUR LOCAL MARKET IN THE COMING YEAR (2014) IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute 46 Global Market Sentiment Survey 2014
13%
22%
18% 16%
16% 15%
29%
19%
14% 15%
12% 11%
25% 24%
16%
13% 12%
10%
Mis-selling by financialadvisers
Market fraud Market tradingpractices
Integrity of financialreporting
Disclosure/use offinancial derivatives
Investmentmanagement
services/structure
2012 2013 2014
*Chart displaying proportion of members ranking the ethical issue as the most serious facing their local market.
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING YOUR LOCAL MARKET IN THE COMING YEAR IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute 47 Global Market Sentiment Survey 2014
24%
21% 20%
16%
12%
6%
27%
24%
18%
15%
11%
5%
21%
18%
27%
15%
12%
8%
20%
16%
21%
17% 16%
9%
Market fraud Integrity of financialreporting
Disclosure/use offinancial derivatives
Market tradingpractices
Mis-selling by financialadvisers
Investmentmanagement
services/structure
Global AMER APAC EMEA
*Chart displaying proportion of members ranking the ethical issue as the most serious facing global markets.
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING GLOBAL MARKETS IN THE COMING YEAR (2014) IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute 48 Global Market Sentiment Survey 2014
24%
30%
29%
28%
26%
26%
26%
24%
23%
22%
20%
18%
17%
16%
21%
15%
15%
26%
22%
16%
19%
19%
13%
12%
14%
24%
17%
21%
20%
22%
20%
18%
19%
22%
16%
19%
16%
15%
28%
16%
32%
34%
Global
Singapore
Japan
USA
Brazil
Hong Kong
United Kingdom
Canada
Switzerland
Germany
South Africa
Australia
China
India
Market fraud Integrity of financial reporting Disclosure/use of financial derivatives
*Chart displaying the top three ethical issues facing global markets (based on global rankings)
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING GLOBAL MARKETS IN THE COMING YEAR (2014) IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute 49 Global Market Sentiment Survey 2014
15%
12%
20%
16%
21%
15%
19%
21% 23%
16%
13%
8%
24%
21% 20%
16%
12%
6%
Market fraud Integrity of financialreporting
Disclosure/use offinancial derivatives
Market tradingpractices
Mis-selling by financialadvisers
Investmentmanagement
services/structure
2012 2013 2014
*Chart displaying proportion of members ranking the ethical issue as the most serious facing global markets.
PLEASE RANK THE FOLLOWING ETHICAL ISSUES FACING GLOBAL MARKETS IN THE COMING YEAR IN ORDER OF THE MOST SERIOUS TO THE LEAST SERIOUS*
CFA Institute
LACK OF ETHICAL CULTURE IN FINANCIAL FIRMS ERODING INVESTOR TRUST
To rebuild the confidence of investors in the financial sector, ethical conduct cannot simply be legislated or taken for granted; it must be fostered and encouraged by an ethical culture at the firm-level.
CFA Institute 51 Global Market Sentiment Survey 2014
54%
13% 10%
7% 4%
2%
10%
51%
16%
10% 7%
3% 2%
11%
56%
12% 12% 9%
4% 2%
6%
61%
7% 9%
7% 5%
2%
8%
Lack of ethicalculture withinfinancial firms
Market disruptions (failed IPO’s, flash
crash etc.)
Poor governmentenforcement
Poor governmentregulation
Lack of stafftraining and
education withinfinancial firms
I don’t think there is a lack of trust in the
finance industry.
Other
Global AMER APAC EMEA
“No opinion” option excluded from results.
WHICH FACTOR DO YOU THINK HAS CONTRIBUTED THE MOST TO THE CURRENT LACK OF TRUST IN THE FINANCE INDUSTRY?
CFA Institute 52 Global Market Sentiment Survey 2014
54%
71%
63%
62%
60%
60%
60%
58%
55%
54%
52%
52%
49%
43%
13%
2%
7%
9%
13%
10%
7%
4%
12%
11%
12%
20%
17%
15%
10%
5%
13%
11%
7%
9%
11%
10%
11%
8%
7%
9%
10%
17%
Global
Switzerland
Singapore
India
Japan
South Africa
United Kingdom
Germany
Canada
Australia
Brazil
Hong Kong
USA
China
Lack of ethical culture within financial firms Market disruptions (failed IPO’s, flash crash etc.) Poor government enforcement
*Displaying top three factors contributing to the current lack of trust in the finance industry.
“No opinion” option excluded from results.
WHICH FACTOR DO YOU THINK HAS CONTRIBUTED THE MOST TO THE CURRENT LACK OF TRUST IN THE FINANCE INDUSTRY?*
CFA Institute 53 Global Market Sentiment Survey 2014
WHICH ONE OF THE FOLLOWING FIRM LEVEL ACTIONS IS MOST NEEDED IN THE COMING YEAR TO HELP IMPROVE INVESTOR TRUST AND CONFIDENCE? 40%
26%
13% 12%
6%
2%
39%
25%
13% 14%
5% 3%
40%
25%
14% 12%
7%
1%
40%
28%
13%
9% 8%
2%
Improved cultureestablished and
encouraged by topmanagement and
executives
Increased adherenceto ethical codes and
standards
Improvedcompensation
practices
Clarification offiduciary duty
responsibilities
Increased staff trainingand education
Other
Global AMER APAC EMEA
“No opinion” option excluded from results.
CFA Institute 54 Global Market Sentiment Survey 2014
40%
49%
46%
44%
44%
43%
43%
43%
42%
39%
38%
36%
34%
30%
26%
20%
24%
22%
27%
18%
20%
23%
20%
25%
23%
37%
29%
30%
13%
16%
11%
15%
10%
18%
15%
16%
15%
14%
15%
8%
17%
13%
12%
6%
7%
12%
10%
9%
14%
10%
12%
14%
15%
10%
18%
15%
6%
7%
10%
6%
8%
11%
5%
6%
8%
5%
8%
7%
3%
10%
2%
1%
3%
2%
1%
1%
3%
3%
3%
3%
1%
1%
2%
Global
Singapore
Germany
Canada
South Africa
Japan
Switzerland
United Kingdom
Australia
USA
Hong Kong
India
China
Brazil
Improved culture established and encouragedby top management and executivesIncreased adherence to ethical codes andstandardsImproved compensation practices
Clarification of fiduciary duty responsibilities
Increased staff training and education
Other
“No opinion” option excluded from results.
WHICH ONE OF THE FOLLOWING FIRM LEVEL ACTIONS IS MOST NEEDED IN THE COMING YEAR TO HELP IMPROVE INVESTOR TRUST AND CONFIDENCE?
ABOUT THIS STUDY
CFA Institute 56 Global Market Sentiment Survey 2014
ABOUT THIS SURVEY The CFA Institute Global Market Sentiment Survey was created to seek input from CFA Institute members and gather feedback on market sentiment, performance, and market integrity issues, and to further our mission of promoting ethical and trustworthy investment markets.
METHODOLOGY An online survey was conducted from 2 to 17 October 2013. All CFA Institute members globally (119,817) were invited to participate in the survey; 6,561 responded, for an overall response rate of 5.5% and a margin of error of ±1.8%. In addition to analysis and reporting at the global and regional level, 13 market-specific reports are also included.
Note: Total percentage of some charts in this report may not add up to 100% due to rounding
CFA Institute 57 Global Market Sentiment Survey 2014
RESPONDENT PROFILE
USA 2,906
CANADA 738
UNITED KINGDOM 302
HONG KONG 185
SWITZERLAND 172
GERMANY 167
CHINA 162
INDIA 162
AUSTRALIA 159
SINGAPORE 137
SOUTH AFRICA 105
BRAZIL 95
JAPAN 87
TOP MARKETS
59% AMER
24% EMEA
17% APAC
# OF RESPONDENTS
CFA Institute 58 Global Market Sentiment Survey 2014
RESPONDENT PROFILE
13%
31%
18%
14%
21%
3%
Years In Industry
≤ 5 years 6 to 10 years 11 to 15 years
16 to 20 years >20 years Not Applicable
34%
17%
4% 3% 3%
Equities Fixed Income Private Equity Derivatives Real Estate
Primary Investment Practice (Top 5)
19%
14%
6% 6% 6% 4%
PortfolioManager
ResearchAnalyst
FinancialAdvisor
Consultant CorporateFinancialAnalyst
RiskManager
Job Function (Top 6)
CFA Institute 59 Global Market Sentiment Survey 2014
ABOUT CFA INSTITUTE CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors’ interests come first, markets function at their best, and economies grow. CFA Institute has more than 119,000 members in 140 countries and territories, including 112,000 CFA charterholders, and 137 member societies. For more information, visit www.cfainstitute.org.
QUESTIONS? Media inquiries: J.D. McCartney Director, Public Relations, The Americas [email protected] Survey inquiries: Prashant Goswami Analyst, Market Intelligence [email protected]
LEARN MORE ABOUT THIS STUDY ON OUR WEBSITE AT: www.cfainstitute.org/gmss