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Investor Daily, 9 June 2010
Investors want active management
Need for flexibility and responsiveness
By Julie May
Wed 09 Jun 2010
Active management amid volatile markets creates buying opportunities for investors, a survey
has shown.
Despite market volatility, undervalued Australian equities have presented favourable buying opportunities
when active management has been applied, a survey conducted at the recent Legg Mason Investment
Symposium has shown.
The survey was conducted with 120 investment professionals including asset consultants, research
house analysts, institutional investors, financial advisers and fund managers.
Findings revealed that 35 per cent of respondents believed the downturn represented a great buying
opportunity, with more than half the participants saying Australian equities were undervalued.
While investors had become wary due to recent market volatility, 45 per cent of respondents believed
recent market falls were a short-term correction.
"This volatility also presents a strong case for active management to take advantage of price
movements," Legg Mason Australia head Annalisa Clark said.
Recent market volatility had also affected investors' view of the fixed-income market, with 80 per cent of
respondents believing it was time to move from a passive to an active fixed-income strategy.
"There has been a major shift in attitudes towards active fixed-income management in response to the
European debt crisis," Clark said.
"With investors still uncertain on short and long-term implications of rising sovereign debt levels,
managers of fixed-income portfolios have to be flexible and responsive to rapid changes in the market."
The survey showed that respondents believed emerging markets would provide better opportunities than
developed markets as the global economy recovered.
Clarke said a push towards socially responsible investing was also on the cards as it was becoming a
global trend, with Australian investors likely to follow suit.
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